Problem
A. What are Agriculture Commodities (such as wheat), Equity, Equity Indices, Energy (such as crude oil), and Foreign Currency derivatives?
o (Use concepts such as Exchange-traded and over-the-counter derivative instruments - their uses and relative benefits Market and counterparty credit risks Risk methodologies - how to calculate, interpret and apply them)
B. What would be two methodologies (risk and counterparty risk) for agriculture commodities, equities, and foreign currency derivatives
o Use concepts such as Notional of contracts
o Current mark-to-market
o Expected exposure
o Stressed potential future exposure)
C. Explain the trading techniques used in Questions A and B and present your expected results.
D. What is short selling?
E. What would be a short-selling strategy for an agriculture commodity to address counterparty risk methodologies?