Would MGRM have had the same cash flow problems if it had been able to buy and sell energy derivatives in the forward market (i.e., rather than using the futures market to cover its net forward positions)?
What will be an ideal response?
MGRM would not have had the same liquidity problems if a long-dated forward market in energy contracts had existed. If a forward market existed, MGRM could have hedged its short forward sales with long forward positions of equal maturity. Often, forward contracts are not marked to market, and therefore, they do not cause cash inflows or outflows until maturity. Therefore, MGRM's exposure to market and liquidity risks would have been much lower.
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Find the probability that exactly 1 of the 3 products is successful
A company markets educational software products, and is ready to place three new products on the market. Past experience has shown that for this particular software, the chance of "success" is 80%. Assume that the probability of success is independent for each product.
Identify the six major tasks of knowledge management
What will be an ideal response?