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Essay Available:
Pages:
1 page/β‰ˆ275 words
Sources:
1 Source
Style:
APA
Subject:
Accounting, Finance, SPSS
Type:
Essay
Language:
English (U.S.)
Document:
MS Word
Date:
Total cost:
$ 4.68
Topic:

General Electric Use of Derivatives

Essay Instructions:

Just Write Part A
Part A (Application of Derivatives) (1 page in total – excluding appendices)
• Report on the derivatives that are being used by one selected company. Please specify what are these contracts and what was (were) the objective(s) behind them. To structure your report, you can identify the company's approach based on 2 of the 4 market variables (i.e., exchange rates, interest rates, commodity prices and equity prices).
• Please choose 1 company in total (i.e., one from either of these stock exchanges: (i) TSX; (ii) NASDAQ and (iii) NYSE). You may choose any company you like (i.e., Non-Financial and Financial). Please limit your write-up to 1 page for the company (excluding appendices). (You are encouraged to use the company's website - annual reports.)

Essay Sample Content Preview:

General Electric Use of Derivatives
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General Electric Use of Derivatives
General Electric is a global conglomerate whose common shares are traded on the New York Stock Exchange (NYSE). The company uses derivatives as a risk management tool. To this end, the company uses derivatives to manage foreign currency risks (cash flow hedges), interest rate risks, and currency risks (fair value hedges).
The use of cash flow hedges helps General Electric to mitigate the risk of fluctuating foreign currency exchange on assets and liabilities. Notably, the company enters into forward contracts with another company to ensure foreign exchange fluctuations do not adversely affect the balance sheets. As of December 31, 2021, the total value of currency exchange derivatives recorded as hedges in the financial statement that the company had with other parties was valued at US$ 7,214 million (General Electric, 2022). In ...
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