MBA assignments help students understand the significance of the managerial role. This involves the responsibilities of financial and human resources, and production and marketing departments in a company. It also involves the management of sales and accounting departments. The financial responsibilities are related to cash flow, costs, income, financial investments, credit, accounting and finance, and the management of assets.
Financial investments involve spending and production expenses. They involve the distribution of profits and recording sales and assets. They include how to calculate the interest rate on investments, and the definition of credit risk. They also involve the use of leverage and the derivative strategies.
The MBA assignments help students understand the issues related to derivatives and risk management. The definition of derivatives is quite different from that of financial risk. The financial risk is mainly associated with the financial instruments related to cash flow, such as money market funds, debentures, etc. Derivatives are mostly used for hedging purposes.
Derivative are short-term financial instruments, whose value is based on the direction or movement of a commodity. They have a short term value, but have a greater or lesser interest rate. Some of the commonly used derivatives are currencies, interest rates, stocks, fixed income securities, and foreign exchange. The use of derivatives greatly increases the volatility of the market, and they also decrease the liquidity.
The problems faced by companies in terms of derivatives are addressed in MBA assignments. Companies often use derivatives to increase their liquidity. Such instruments are mostly used to reduce the impact of fluctuations in earnings that occur due to seasonal factors. The use of derivatives help companies avoid sudden and drastic changes in price, as these types of changes in price may not always be predictable.
A very important issue when it comes to derivatives and risk management is the impact that it can have on the market. A firm’s potential exposure can be decreased by using derivatives. These instruments help prevent the spread between the expected and actual earnings and cash flow. The use of derivatives to help mitigate risks in different parts of the company, especially in non-core areas.
The use of derivatives can also affect the performance of companies in their financial statements. This can affect the trust of the investors in the company. There are three major areas that are affected by derivatives and risk management:
The third main area of derivatives and risk management are the use of derivatives to reduce the volatility of the market. It helps companies to offset the effect of non-conventional movements in the market.
When the uses of derivatives and risk management are carefully examined, it can clearly prove that these instruments and methods have a negative impact on the health of companies and the markets. It affects the volatility and price movements. This can result in lower profits, a market bubble, higher share prices, an increase in the over-the-counter share market scams.
In order to understand the use of derivatives and risk management, it is advisable to study MBA assignments on this subject matter. You can get MBA assignment help from experts who have studied and developed business management strategies for companies.
You can find many such professionals online or through the MBA forum. You can also ask for help from the teachers and get MBA assignment help from them.