Please find help and some guidelines related to risk management role.
The content below has been written to get you started on this assignment. The content of the solution must not therefore be passed on as your own work for grading or commercial purposes. You can also use the listed resources to explore your topic further.
Risk Management Role of Options
Options are the instruments, which provide right to take an action without the obligation to take that action. It is effective to manage the risk as by using this tool, managers can shift the risks. It plays a role of strategic thinker, which is helpful to improve the project planning and strategic thinking, which is a valid risk mitigation aspect for the firms. Options plays an important role tom reduce the risk level and to increase values from a contract (Damodaran, 2008). Options give right to terminate a contract at any time, in which an investors see the risk at less cost, which is effective to reduce the overall risk for the ...
The following posting helps analyze the risk management role of options, futures and forward contracts.