Managing Financial Risks With Derivatives Thesis

Managing Financial Risks With Derivatives - Thesis Example According to the research findings in the current business environment markets have become increasingly global. Global data is increasing very fast with the establishment of a number of multinational companies. Although financial risk has increased significantly in recent years; risk and risk management are not contemporary issues. The result of increasingly global markets is that risk may originate with events thousands of miles away that have nothing to do with the domestic market. Quick changes in market reactions can be expected with availability of instantaneous information. The economic climate and markets can be affected very quickly through changes in exchange rates, interest rates, and commodity prices. Counter- parties can rapidly become problematic. As a result, it is important to ensure that financial risks are identified and managed appropriately. Preparation is the key component of risk management. Derivative is the widely used strategy adopted for risk management. It t ends to avoid or minimize risk occurrences faced by the institutions. Usage of proper derivative instruments provides advantages of cheaper foreign exchange, cheaper interest rate and an opportunity to sell shares at flexible prices. Derivative instruments tend to transfer risk from the user to the providers. It is traded widely among financial institution and exchanges. Derivatives play a fundamental part an important role in the risk management of equity, bonds, or short term interest rates. Use of derivative instruments like futures, forward, hedging, and swaps comes into play for effective control of financial risks (grammar mistakes in this sentence). Derivative instruments like futures, forward, hedging and swap can be used effectively to control financial risks. Many The various financial risk (sense) Many risk elements that exist in the market are like credit risk which arises from the potential that an obligor is either unwilling to perform on an obligation or its ability t o perform such obligation is impaired resulting in economic loss to the bank. Besides market risk is the risk that the value of on and off-balance sheet positions of a financial institution will be adversely affected by movements in market rates or prices such as interest rates, foreign exchange rates, equity prices, credit spreads and/or commodity prices resulting in a loss to earnings and capital. liquidity risk is the potential for loss to an institution arising from either its inability to meet its obligations or to fund increases in assets as they fall due without incurring unacceptable cost or lose operational risks " is the risk of loss resulting from inadequate or failed internal processes, people and system or from external events " (Risk Management Guidelines for commercial Banks &

PC Reflective Assignment Example | Topics and Well Written Essays - 2000 words

PC Reflective - Assignment Example He revealed that his family and close associates have been shocked initially but later they reconciled themselves with the situation. Laurie Strike actually desires euthanasia which means â€Å"the intentional killing by act or omission of a dependent human being for his or her alleged benefit† There are many form of euthanasia like: The American Medical Association opposes the concept of euthanasia and held the view that a physician assisted death is harmful not only for the ethics of medical profession but for the patient also. The association negates the idea of abandoning the incurable patients instead more love and affection should be shown to these patients to lessen their miseries. Like AMA, many medical practitioners in Australia have the view that medicines are meant to cure the diseases of patients and the concept of euthanasia is quite opposite to it. In euthanasia, medicines are used to snatch the life of a living being. Pope Benedict XVI declares it a grave sin. Besides, he also declares abortion as a kind of euthanasia, when a mother chose abortion to avoid abdominal pains. He stated, â€Å"The deliberate decision to deprive an innocent human being of his life is always morally evil and can never be licit†. He asked the family members of patients who were suffering with the incurable diseases to come forward and help the patients with love and care; in this way the family system would also be strengthened. The National Catholic Bioethics Center declares life as a beautiful gift of God and said, â€Å"God did not make death, nor does He rejoice in the destruction of the living† (Wisdom 1:13). They are saying that human life is precious and any effort to temper with it will be immoral and grave sin. Roman Church also has the same views on euthanasia and terms this concept as morally wrong. According to BBC, â€Å"The Roman Church does not accept that human beings have the right to die. Human