FIN30014: Financial Risk Management Case Study, SUT, Malaysia Identify ONE financial risk faced by Alphabet Inc given the above scenario Systematically review and critically evaluate research from a variety
| University | Swinburne University of Technology (SUT) |
| Subject | FIN30014: Financial Risk Management |
Question 1
The next payment is due 6 months from now. Given the current economic environment in the US and globally, Alphabet Inc. fears that it will be adversely affected and wishes to hedge to reduce its risk related to interest rate changes. Based on this scenario, please answer the following questions:
(a) Identify ONE financial risk faced by Alphabet Inc. given the above scenario. Systematically review and critically evaluate research from a variety of sources to explain why you have identified this as a risk, and whether you would consider hedging. Please discuss in your answer the outlook for the underlying variable and cite evidence of an adverse and/or favorable direction. NB: reference list will not be part of the word count.
(b) For the risk, you have mentioned in part (a) please recommend a hedging strategy that is consistent with the outlook discussed in part (a) and explain why you have chosen this strategy above all others
(c) Irrespective of your answer above, assume you are using an exchange-traded option ‘combination’ strategy to hedge your risk. Please use real data from the CME group and provide the total cost of the hedge (the net premium), the strike prices used, and the number of contracts required. Show all calculations and provide screenshots of the data obtained from the CME group. Please do not include screenshots in an appendix, screenshots must be within part (c).
Required:
(a) Assume that you are a hedge fund manager and have invested in $1,000,000 worth of Russian government bonds one year ago and have decided to hedge the credit risk of these bonds at the time. Formulate a creative solution to hedge the credit risk of this reference entity. Analyse
how you can be protected from credit risk based on such a strategy and possible drawbacks.
(b) What are the implications of speculation using credit default swaps in the context given in the above article, to the broader society and economy? Provide examples where necessary.
Are You Searching Answer of this Question? Request Malaysian Writers to Write a plagiarism Free Copy for You.
Get Help By Expert
Elevate your academic success with expert online assignment writing services at Assignment Helper MY. Navigate the intricacies of the FIN30014: Financial Risk Management Case Study with confidence. Our dedicated assistance caters to Swinburne University of Technology (SUT) students, ensuring top-notch, tailored solutions. Let us guide you through comprehensive risk management analysis. Achieve excellence on every front with our proven expertise.
Recent Solved Questions
- Finance Accounting and Management Report, UON, Malaysia You have been hired as a management consultant to analyze the current financial position of the company
- Strategic Management Assignment, OUM, Malaysia Introduction of KPJ Healthcare Berhad including its vision and mission statements, objectives
- DPB40103: Organizational Behavior Case Study, PM, Malaysia Whether you have a roommate by choice, by necessity, or through the random selection process of your school’s housing
- Banking Assignment, APU, Malaysia As a member of the AML, CDD checks need to be performed for the potential client, GMT due to the nature of the business
- Business Law Assignment, TU, Malaysia On 1.12.2022, Marie offered to sell her porcelain doll to Lisa at RM200.00. Six days later, on 7.12.2022 Lisa rang Marie
- MCE604: Managerial Economics Assignment, AeU, Malaysia Mr. Rahim is planning to pursue MBA studies. Initial inquiry shows that he will have to pay RM 25,000 as a tuition fee
- GHZM2023: Tourism Marketing Case Study, UUM, Malaysia Do you think charging a levy of USD10 for every tourist visiting Bali would be sufficient to dissuade visits to the island
- BBPB2103: HUMAN RESOURCE MANAGEMENT Assignment, OUM, Malaysia The purpose of this assignment is to enhance learners’ ability to explain the disciplinary procedures and challenges in taking disciplinary
- NBNS1104: Discuss strategies to overcome adolescent pregnancies and reasonable steps to avoid the stigma: transculture in nursing Assignment, OUM, Malaysia
- Toxicology Essay, UM, Malaysia Explain the dose-response relationship of all toxicants. Which one is more potent? Toxicant A or B
