Assignment A:
Derivatives-such as forward contracts, futures contracts, options, and swaps-are financial securities whose economic value depends on the value of an underlying asset. Take two examples of derivatives and evaluate their use in hedging and speculating. What are the similarities and differences between hedging and speculating?
Should be a minimum of 300 words.
Assignment B:
The exchange rate between the U.S. dollar and other currencies has gone through wide fluctuations in recent years. Use an example of a foreign currency (e.g., Mexican peso, British pound, etc.) and discuss how it has changed in price relative to the U.S. dollar over the past two to three years. Analyze how exchange rates affect domestic economic activity, including the supply and demand factors that moved the relative prices.
Visit the Reuters website for information on currencies.