All work must be original and use 2 academic journals for in text citations. No pagiarism.
Write a 2-page paper in which you analyze the role and purpose of the different options, swaps, future and forward contracts. You are required to use at least two journal articles and follow proper APA format.
All work must be original with at least two in text citations and references from Academic journals. Must be two pages excluding refrences and title page
Answer preview
with the other paying floating rates. Swaps act as risk shields because the two parties who are involved in interlinked transactions shield their risk by paying some advance funds into the other party so that in the event of an unpredicted result, the providing party takes the overpaid price. Futures are contracts that involve the exchange of assets, and they determine factors such as the delivery time of a commodity, its size, and even the price. A future contract is unique in that in every asset bound for exchange; there exist different features specified in the contract. Therefore, for a commodity to be exchanged, there are specific set requirements that it must meet. Also, the size of the merchandise is considered because it determines the number of units to be involved in a contract (Pan & Zhou, 2017). The futures contracts are easily traded which benefits producers by giving them access to enough raw materials by efficiently handling many suppliers or taking large amounts of commodities.
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