Questions from Financial Management

Q: Define a call option, and contrast it with a put option

Define a call option, and contrast it with a put option.

Q: What is a swap contract? How are swap contracts used to

What is a swap contract? How are swap contracts used to hedge interest rate risk?

Q: Chemical plants rely on crude oil as the base material for the

Chemical plants rely on crude oil as the base material for the manufacture of a whole host of products. How might such a firm hedge the risk of a price increase in the cost of crude oil spanning the n...

Q: Define the term risk management.

Define the term risk management.

Q: A firm’s cash flows are risky for a number of reasons.

A firm’s cash flows are risky for a number of reasons. Identify and discuss five sources of risk or volatility in firm cash flows.

Q: What was the risk management policy followed by the Chesapeake Energy Corporation

What was the risk management policy followed by the Chesapeake Energy Corporation (CHK) with respect to the price of the oil and gas it needed for its future production prior to 2011?

Q: Firms regularly use insurance as a means of managing their risk exposure

Firms regularly use insurance as a means of managing their risk exposure. What are some of the types of risks that are typically transferred to insurance companies through the use of insurance contrac...

Q: Finance for Life: Do You Need Life Insurance? on page

Finance for Life: Do You Need Life Insurance? on page 638 discussed factors involved in the decision to purchase life insurance. What are some commonsense guidelines that can be used to answer the que...

Q: What is a forward contract, and how does it typically differ

What is a forward contract, and how does it typically differ from an exchange traded futures contract?

Q: Mark McNibble is CFO for McNabb Fabrications, Inc. Mark is

Mark McNibble is CFO for McNabb Fabrications, Inc. Mark is considering a new project that involves the introduction of a new product. McNabb is in the 34 percent marginal tax bracket has a 15 percent...