Question
Tom Curtis is the treasurer of the midsized corporation, Ricardo International. The firm manufactures various plastic components used in the computer hardware industry. When the
Tom Curtis is the treasurer of the midsized corporation, Ricardo International. The firm manufactures various plastic components used in the computer hardware industry. When the firm opened up, it initially did business in the Midwest region of the United States but now sells its components to customers in other countries. Mr. Curtis requests that you report and discuss some issues relating to futures contracts, which might be used in the future by the firm to hedge currency risk and interest rate risk. Some of the issues he needs to know more about include the following:
Identify possible benefits to the firm in using the futures markets
The most important functions and importance of the clearinghouse
How would you explain the concept of marked to market?
Describe regulatory responsibilities of the National Futures Association and the Commodity Futures Trading Commission and provide some historical background as to how and why the agencies were created.
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