ASSIGNMENT

For this assignment, you will be discussing the bond environment. You will identify techniques, characteristics, and the motivations involved in hedging.

If you participate in the Assignment Discussion Board, summarize your findings in your paper.

In a Word document, supplemented with Excel reports, if you think appropriate,  submit a minimum 2-page research paper that addresses all the items in the Checklist. There are no investments required this week. You may use any resource; you are not limited to your textbook. Be sure you give credit where credit is due using APA format and citation style.

Checklist
• Explain the basic characteristics of options markets and individual options contracts.

• Analyze how investors can make (or lose) money from put and call options by creating exposure and hedging it with those tools (quantify).

• Identify techniques that can be used for hedging.

• Describe the motivations of investors for utilizing options.

• Design a use of options combination strategies, such as spreads and straddles, to address a hedging exposure you develop. Select the best solution you think would address the exposure.

• Explain the function of futures contracts for speculators.