Discuss the role of financial derivatives

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1.Compare and contrast the 4 common forms of derivatives. Cite a scenario to elaborate each.

2.Discuss the role of financial derivatives and how they remove/mitigate the uncertainties in the following scenario.

Scenario A: Consider a farmer, whose fresh crop of corn will be harvested in three months from now. He is unsure about the price he will receive at that time. Will he get a buyer when he is in the market to sell corn, three months later?

3.Discuss the role of financial derivatives and how they remove/mitigate the uncertainties in the following scenario.

Scenario B: An IT company will receive its payment in US$, a month later. It is unsure about the rupee value of this receipt, at that time.

Reference no: EM132743440

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