Choose a corporation (you may make up a company although this makes it a lot less interesting)

Choose a corporation (you may make up a company although this makes it a lot less interesting).  Describe the activities of this corporation and some of the main risks that face this corporation.  Tailor this description of risks to what you expect to discuss in Part II.

Choose a corporation (you may make up a company although this makes it a lot less interesting)

Group Assignment

Purpose:
The purpose of this assignment is to give you the opportunity to more fully understand the uses of derivative securities.  By objectively undertaking this assignment, you will be aware of the practical uses of derivative securities to assist in hedging the day-to-day activities of corporations.

Content:
You have heard that derivatives can hedge many of the variables which affect the bottom line figure of your corporation but which you generally have no control over and which are not in the line of the business of your corporation.  You therefore must devise strategies involving exchange traded derivative securities to control for potential adverse movements in these variables.

Part I (2-3 pages)
Choose a corporation (you may make up a company although this makes it a lot less interesting).  Describe the activities of this corporation and some of the main risks that face this corporation.  Tailor this description of risks to what you expect to discuss in Part II.

Part II (4-5 pages)

Describe strategies which would involve the use of derivatives contracts to control for some of the risks described above.  In describing these strategies, refer to specific derivative contracts and the specific exchanges they are trade on.  Also, discuss the advantages and any limitations of your strategies.

Form:
Firstly, the assignment is expected to be submitted in report form, including a title page, executive summary (abstract) and the two sections described above.  A complete list of references.

Secondly, the report must be no longer than 7 pages (excluding title page, executive summary, and any charts, tables or appendices).

Thirdly, the assignment should be typed in a 12-point Times Roman font, double spaced and with normal margins.  The report should be spell-checked and proof-read.

Finally, Groups may be of 2-6 students and may be across streams