Reference no: EM132243745

Discussion 1 : "Hedging"

Please respond to the following:

• Create a scenario where an investor would benefit from using forward and future contracts to hedge an existing risk exposure.

• Explain how an increase in interest rates may impact the scenario you created.

Discussion 2 : "Options"

Please respond to the following:

• Create a scenario where an investor would benefit from using option contracts to minimize risk.

• Evaluate how models used for valuing stock options can be adapted to other underlying assets such as stock indexes.