Derivatives Used by Equitable Bank, Calavo Growers Inc., and Southwestern Energy (Essay Sample)
This is finance assignment , each page about 300 words, need write 6 pages.
Need choose 3 companies from those 4 industry :1.Energy 2. Finance services 3. Agriculture 4.Technology.
Please choose 3 companies in total(i.e.one from each stock exchange:(i)TSX;(ii)NASDAQ and(i)NYSE).You may choose any companies you like(i.e.Non-Financial and Financial).All three companies can be non-financial or one of the three companies can be a Financial Services Institution.
Base the requirement to write. there are have part of sample will helping ur writing.( can not choose sample Company)
I need know the which 3 companies in 6 hours. when the companies pass, we can get this order.
A) DERIVATIVES USED BY SELECTED COMPANIES
EQUITABLE BANK
This is a bank of Canadian origin founded in 1970. It has its main activities as lending for residential and commercial purposes. It has recently offered saving services and ranks among the biggest banks in Canada with an asset worth of $25 billion.
Hedging Interest rate risk
In retail banking there involves a lot of deposits and loaning. Profits are thus generated due to the difference between the interest on loans and deposits. They have thus been engaged in activities that hedge against risk of losses. Equitable Bank for instance has made use changes in interest rates to secure their profits. This is by buying future interest rates to secure itself from future changes that may hurt its profits (Varghese, 2017). They have also made used of pension funds to secure against defaulters. For instance the bank in 2008 made use of the pension funds to purchase a credit default swap (CDS) where they were to be paid in case their bond was to be worth less. In this hedge practices, the bank main objective was to protect its assets and the net profits of the firm in the future.
Commodity price risk
The bank has also taken risk. It is worth noting that in financial derivatives, one party takes risk while the other is protecting itself (Barrera, 2012). In the first case, Equitable Bank was protecting itself. There are other cases where it has been the risk taker. For instance, they have made use of commodity prices. In this case they
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