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.
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
- Quantitative method for business Assignment, LU, Malaysia: The flagship state campuses are led by a Rector and smaller campuses are led by a Coordinator
- Advanced Digital Forensics (ADF), Individual Assignment, APU, Malaysia
- GSGM7324 Final Assessment: Organizational Development and Change Management UNITAR International University
- Nueral Crest Cells Assignment, OUM, Malaysia Jelaskan konsep etika dan peradaban yang diamalkan dalam konteks Malaysia sebagai pelajar bagaimanakah anda mengaplikasikanya
- KNC6013: Advanced Conventional Energy System Assignment, UMS, Malaysia The global warming scourge is threatening to ravage humanity and Rising sea levels
- SMP10803: Principles of Marketing Assignment, UMP, Malaysia You are planning to venture into one of the agribusinesses in the area in which you live Discuss 3 (THREE) major external forces that will impact your future business.
- Law Equity & Trust Assignment, IIUM, Malaysia Leo Pedersen and Calvin Pedersen are brothers. In 2010, Leo left his job to set up Viking Oak Software Ltd
- PSY231: Evolutionary Psychology Essay, MUM, Malaysia You are required to select one topic or issue from any area of psychology, and explain how the issue can be viewed from an evolutionary psychology perspective
- Introduction to Business Ethics and Values Assignment, LUC, Malaysia The role of Small and Medium Enterprises (‘SMEs’) in the Malaysian economy is undoubtedly important
- MPU3223_V2 Entrepreneurship Assignment OUM Malaysia Choose a Popular Travel Agency in Malaysia Such as Reliance Travel
