FIN 415 Week 4

Individual Risk Management Problem, Set II

Resource: Foundations of Finance

Prepare written responses to the following assignments from the text:

Ch. 17: Problems 17-1, 17-2, and 17-5

Learning Team Risk Management Summary

Resource: Foundations of Finance

Prepare written responses to the Mini Case problems from the text:

Ch. 17: Problems A-I

Prepare a 350- to 700-word summary in which you compare and contrast at least two risk management tools and techniques from forward contracts, future contracts, and derivatives.

Make a recommendation to management about which technique is most appropriate from a risk management standpoint. Support your findings by including answers and rationale from the Mini Case.

Discussion Questions

What is tolerance of risk and how would you measure it? How would you compare and contrast being risk seeking vs. risk avoidance?

What is valuation? How would you apply valuation methods? Explain why it is an important tool in risk management.

What is a risk management plan? Choose a component and relate this to the effectiveness of the risk management plan.