Primary Financial Risks Research Project & Pricing Data - Statistics Assignment Help

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Assignment Task

    


To propose, following each of your recommendations in (c) above, specific hedging
strategies which require you to describe the following:

i. the exposures to be hedged,
ii. what percentage proportion of the exposure is to be hedged,
iii. which derivative(s) are to be used to hedge each exposure, 
iv. the number of derivative contracts for each hedge,
v. the delivery months for each derivative, and
vi. the prices at the time of making the recommendation - futures prices, option strike
prices, total premium costs (including an explanation of the choice of strike
price(s)) (you will need to research this- use actual data).
Provide screenshots as evidence of pricing data obtained from CME.
For part (d) you may assume a hedge horizon of 6 months and you can use futures or
options with the relevant expiration date for hedging.
Also, in part (d) if you recommend option strategies you may also wish to consider
strategies that require the ‘purchase and sale’ of two different options (e.g. an option
spread or combination strategy) to reduce the cost of the option strategy.

 


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