Expert answer:just give responds for two students in file. words within 50-100 thanks.
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Instruction:
First, in your initial post, write a brief self-introduction and share your initial thoughts
about the derivative markets and your understanding of the role they play in risk
management and information discovery. What existing knowledge of the derivatives
market do you bring to this course, and what do you hope to learn more about?
Next, review the article An Understanding of Financial Derivatives and the CFA
Institute: Code of Ethics and Standards of Professional Conduct and address the
following:
How did the history of financial derivatives develop? Describe how we use financial
derivatives today, and how that purpose has evolved.
In what ways do financial derivatives address specific risks and play a role in risk
management?
How does the CFA Institute: Code of Ethics and Standards of Professional Conduct
apply to investments in this market?
Within the context of your own development as a financial professional, how do these
investments apply to your career interests or goals?
(You just need to answer the question below in red words.)
When responding to your peers, comment on any common experiences or goals they
described and/or share insights or resources to support or refute their initial post.
Challenge any assumptions made about the derivatives market, and look to further
develop the discussion surrounding risk management and information discovery.
Student one:
First Impressions of the Derivatives Market
Derivatives started as instruments to hedge risk, for instance if a farmer want to sell
its crop but she is uncertain about the price in the future, she could enter into a
forward contract to sell her product today for a future delivery at a certain price, that
way the price risk is moved away from the farmer. However, derivatives were
instruments to hedge risk, now days they have evolved with different uses and most of
them are used for speculative purposes.
Through derivatives any corporation willing to manage its risk can hedge exposure to
futures prices of commodities, currency exchange rates and interest rates transferring
the uncertainty to somebody else interested in bearing that risk.
The Code of Ethics and Standards of Professional Conduct of the CFA Institute
advocates for high standards of ethics in the investment industry to the benefit of
society by securing high levels of trusting among customers and practitioners that
ultimately will assure the investment profession itself. This goal is pursued by the
STANDARDS OF PROFESSIONAL CONDUCT that covers seven chapters ranging
from Professionalism, Duties to Clients, …, and Responsibilities as a CFA Institute
Member or CFA Candidate.
Derivatives will play a central role in my career as instruments to transfer risk, bear
with risk and deal with credit exposure as a portfolio manager.
Student Two:
A derivative market is a security with a value that is related to or gotten from at least
one or unknown assets. The derivative itself is an agreement between at least two
gatherings in view of the benefit or resources. Its value is controlled by changes in the
underlying assets. derivative could be utilized as a part of risk administration by
supporting a position to ensure the risk of an adverse move in a benefit. Supporting is
the demonstration of taking a balancing position in a related security, which mitigates
against unfavorable value developments.
After reading the article, as a basic idea in the past has been changed into perplexing
and standard contracts in the Chicago Boards of Trade time. It has turned into an
activity of complex money related contracts and instruments. There are two most
huge reasons for subsidiaries; Price discovery and risk management. The future and
current costs of the advantages rely upon the derivatives.
Most as of late, June 2009, values (stocks) had been produced to enable dealers to
easily contribute or fence estate risk, permitting considerably more greatly access to
property derivatives for little speculators since value exchanging accounts have littler
store necessities. Managing risk is an essential component that can decide if a
financial firm can succeed or go bankrupt.
The Code of Ethics and Standards of Professional Conduct of the CFA Institute
advocates for exclusive expectations of morals in the speculation business to the
advantage of society by securing elevated amounts of trusting among clients and
specialists that at last will guarantee the venture calling itself. This objective is sought
after by the STANDARDS OF PROFESSIONAL CONDUCT that spreads seven parts
running from Professionalism, Duties to Clients, and Responsibilities as a CFA
Institute Member or CFA Candidate.
References:
Derivatives: The Risks and Rewards. Third way 2017. Retrieved November 17, 2017.
fromhttp://www.thirdway.org/report/derivatives-the-risks-and-rewards
Derivative.
Investopedia
2017.
Retrieved
November
https://www.investopedia.com/terms/d/derivative.asp
17,
2017.
From
…
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