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Exercise 1.1

Hanover Inc. has engaged in a futures contract to hedge silver prices for next year's production, with the contract managed by a commodity broker on the CME Global Exchange. The document outlines the need for establishing controls for companies involved in derivative trading. These controls are essential to manage risks and ensure compliance with regulations.

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51 views1 page

Exercise 1.1

Hanover Inc. has engaged in a futures contract to hedge silver prices for next year's production, with the contract managed by a commodity broker on the CME Global Exchange. The document outlines the need for establishing controls for companies involved in derivative trading. These controls are essential to manage risks and ensure compliance with regulations.

Uploaded by

nic
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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During the current year the management of Hanover inc.

, entered into a futures contract to


hedge the price of silver that will be needed for the next year’s production. The contract, which
is held by Hanover’s commodity broker, is marketable and exchanged on the CME Global
Exchange.

Required:
1. Describe the types of controls that should be established by a company that engages in
derivative trading.

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