1,543
18
Report, 2 pages (250 words)

Financial risk report example

Advertising We'll write a high-quality original custom paper on Financial risk report example just for you with a 15% discount for the 1st order Use a Discount Use a Discount

MML Company being a mining and extraction company for Gold and Copper is under the threat of financial risk from losing the value of the commodities in which the company operates. By value of the commodities, I mean, that with changes in the copper price over the coming months, the company might have to face losses, if the price turns downside (it is expected that copper price will fall, following the trend given in CME Website).
For Instance, it is reported that the company will extract 500000 pounds of copper. However, since the copper pricing is affected by the number of factors as:
– Demand for residential as well commercial construction.
– Overall trend in cyclical industries, such as construction and industrial machinery manufacturing, as well as to political situations in countries where copper mining is controlled by the government.
Thus, on a global scenario, copper prices are affected by number of factors and courtesy these factors, we can expect significant fluctuation in copper prices which can expose the company to financial risk of losing their profits to decrease in copper prices.
b)
In order to offset the financial risk, the company can enter into hedging contracts as copper futures. In Australia, CME Group is offering copper futures which can be used as tools of hedging the financial risk by the investors. As for MML, if the company enters into copper futures contracts, they can lock in a certain price for the selected month copper future and can thus avoid the likelihood of price movements in the copper.

Works Cited

CME Group. (n. d.). Copper Futures Quotes. Retrieved May 6, 2014, from CME Group: http://www. cmegroup. com/trading/metals/base/copper. html
Parkin, M. (2012). Indsutrial Cycles. In C. Institute, Economics (pp. 128-140). Boston: Custom.

Thanks for voting and helping us improve!
Financial risk report example. Page 1
Financial risk report example. Page 2
Financial risk report example. Page 3

The paper "Financial risk report example" was contributed to our database by a real student. You can use this work as a reference for your own writing or as a starting point for your research. You must properly cite any portion of this sample before using it.

If this work is your intellectual property and you no longer would like it to appear in our database, please request its deletion.

Ask for Removal

Create a Citation on Report

References

PaperPrompt. (2021) 'Financial risk report example'. 28 November.

Reference

PaperPrompt. (2021, November 28). Financial risk report example. Retrieved from https://paperprompt.com/financial-risk-report-example/

References

PaperPrompt. 2021. "Financial risk report example." November 28, 2021. https://paperprompt.com/financial-risk-report-example/.

1. PaperPrompt. "Financial risk report example." November 28, 2021. https://paperprompt.com/financial-risk-report-example/.


Bibliography


PaperPrompt. "Financial risk report example." November 28, 2021. https://paperprompt.com/financial-risk-report-example/.

Work Cited

"Financial risk report example." PaperPrompt, 28 Nov. 2021, paperprompt.com/financial-risk-report-example/.

Get in Touch with Us

Do you have more ideas on how to improve Financial risk report example? Please share them with us by writing at the [email protected]