For this first milestone, based on your understanding of the financial situation presented in your chosen case study scenario, you will recommend three or four different types of derivatives to address the investment need(s) of the firm featured in the scenario.
The recommendations should include forwards and/or futures, swaps, and options and address any risks associated with these choices. You will explain how economic investment and market expectations are communicated in the price and behavior of the derivative instruments, and describe how the proposed strategy addresses the investment need(s) of the firm featured in the chosen scenario.
To complete this assignment, review the Final Project One Milestone One Guidelines and Rubric document.
Recommendations and Rationale: Derivative Instruments: Good start, you described the structure and use of each derivative very well. For this project you want to take the next step and talk about how you could apply them to some of the challenges that Ford may have, particularly as an international firm and also one that relies heavily on material inputs (think steel and aluminum). In this case you could use currency swaps to even out any currency fluctuations the might happen on the open market and futures contracts on the input materials so they can plan on set input costs for a period of time.
Recommendations and Rationale: Instrument Performance: For this section take the derivatives that you chose in the section before and talk about what happens to them in different market environments. As an example what would happen to a steel futures contract if the price of steel went way up or way down.
Articulation of Response: For the Final Project document you will want to make sure that it is in APA format.
Please revise my original paper that I got B- according to Instructor Feedback and follow the every elements in rubric!!!!!!!!! very important.