7244AFE Derivatives & Risk Management Report: EliteCopper Corporation

This report presents a case study on risk management for EliteCopper Corporation, focusing on the copper futures market and appropriate hedging strategies. The analysis explores the volatility of copper prices and the company's exposure to market risks. The study reviews relevant literature on hedging techniques, optimal hedge ratios, and the relationship between spot and futures prices. The report recommends long hedge futures as a primary strategy and floating price contracts. The study also examines historical copper prices, the company's exposure to copper price fluctuations, and the application of futures contracts for risk mitigation. The conclusion emphasizes the importance of understanding market dynamics and implementing effective hedging strategies to manage financial risks. The report is a consulting report for the client. The assignment is for a course on derivatives and risk management.