Derivatives Assignment Example | Topics and Well Written Essays - 750 words

Derivatives - Assignment Example With the help of forward contracts two parties can fix the exchange rate between them for the future transactions (Federal Reserve Bank, 2010). This simple kind of agreement can eliminate exchange rate risks significantly. As the exchange rate is already decided between the two parties, transaction will take place in that rate only. With the help of future contracts also foreign exchange risks can be hedged. This derivative is also somewhat similar with forward contract. But liquidity of this contract is high as it is generally being traded on organized markets (Federal Reserve Bank, 2013). With the help of this contract parties are to buy or to sell a specific currency at a future date, at a particular rate of exchange which is fixed and agreed upon by the two parties in present. Option is also a derivative through which foreign exchange risk can be hedged. With the help of this contract interests of the buyers and sellers are taken care of significantly (Kotze, 2011). According to this contract, buyers have the right but do not have any obligation to buy or sell a particular currency at a particular exchange rate. But sellers have obligations if the buyers exercise their rights. In this way with the help of options foreign currency risks can be hedged. Derivatives are generally used for hedging against foreign exchange currency risks. There are several examples where derivatives have caused significant losses for the company. MG was significantly impacted by the usage of the derivatives. Using derivatives were integral parts of the company’s marketing and hedging programs. In 1993 the organization incurred huge losses related with the derivatives (Nihalani, 2011). The losses were over US $ 1 billion. At that point of time it was the largest derivative loss by any company. The organization was on the verge of bankruptcy. The bank was forced to seek for a rescue package of $1.9 billion from a

Oldcross Borough Council Assignment Example | Topics and Well Written Essays - 2000 words

Oldcross Borough Council - Assignment Example In other words, we can say that public sector procurement is advantageous. The public sector is always in a better position if we compare the investment projects of the economy of any country. The reason may be the presence of Government at the back of the project to fully support it (Tosics & Gaal 2007). The specialists or experts can be hired from different fields to make this project fully working. The idea of the cultural centre is unique and the experts will definitely make it real with their efforts. We only need truly devoted people for this project of building cultural centre. After completion, this cultural centre will stand as an example for other community councils because of its unique idea of placing different things under one roof. These kinds of public projects are also facing competition regarding their procurement decisions (Econ 2004). The public sector is always a source of revenue for the investors (Macfarlane, Cook & Collins 2008). The concept of Value for Money can be described as the best possible permutation of cost and quality to meet the customer’s requirements. Usually the public sector projects are easy to keep under estimated cost because of certain policies and procedures. For such public projects we can easily maintain the blend of finest quality and manageable cost keeping our estimated budget under control. This cultural centre will be constructed on a land which is owned by the Oldcross Borough Council just near to it. This piece of land is a neglected portion and now the management at Community Department is planning to utilize it for the welfare of the citizens. This cultural centre will be a worth visiting place for all the individual of any age i.e. teenagers, juniors and adults. The cultural centre will not only lend books but also cassettes, CDs, DVDs, large collection of computer software, and even books in soft copy also. There will be a library shop in the