Week 4 DQ 2

Derivatives"Please respond to the following:

• * From the e-Activity, examine the derivatives that were involved in the financial collapse of 2008. Speculate on the most likely cause of the collapse. Support your position with one (1) example.
• Imagine that you are the CFO of an MNC with a million dollar obligation payable in euros in 90 days. Determine the type of derivative that you would use to protect yourself against either a drop in the dollar or an increase in the euro. Provide a rationale for your decision