Risk Financing and Insurance Coursework 1 - Ocean Cuisines Analysis

This coursework report delves into the realm of risk financing and insurance, using a case study of Ocean Cuisines plc. Part 1 focuses on the valuation of employee stock options, considering factors such as the strike price, vesting period, and market volatility. It requires an analysis of whether to exercise options at a specific stock price, along with the determinants influencing this decision, and the determination of minimum and maximum option values. Part 2 shifts the focus to derivative instruments, specifically discussing the advantages and disadvantages of airline companies hedging their fuel costs. The assignment requires a comprehensive understanding of financial risk management, derivative valuation, and the practical application of hedging strategies within the context of business operations. The report emphasizes the importance of clear, logical, and well-supported arguments, integrating theoretical knowledge with practical scenarios. It adheres to specific formatting, referencing, and submission guidelines, including word count limits and the use of the Harvard referencing system. The coursework aims to assess the student's ability to apply financial concepts to real-world business challenges.