Risk Analysis of Enterprise Financial Derivatives: Evidence from MGRM Company
These authors contributed equally.
- 10.2991/assehr.k.211209.168How to use a DOI?
- Financial derivatives; Metallgesellschaft Refining and Marketing; SWOT analysis; PEST analysis
The hedging of financial derivatives is crucial for enterprise risk management. However, enterprises often ignore the complexity and leverage of derivatives transactions as well as add speculation in hedging operations, which attributes to the failure of hedging. A bad hedge will bring huge losses to enterprises and even lead to the risk of bankruptcy. Therefore, learning from the failure of others is helpful to improve the risk awareness of enterprises. Taking the bankruptcy of Metallgesellschaft Refining and Marketing (MGRM) company as an example, this paper investigates the conditions for the usage of financial derivatives based on SWOT and PEST as well as analyses the hedging failure process and related risks. According to the results, financial derivatives need to recognize the nature of transactions, prevent and control technical operational risks and actively manage after position establishment. These results shed light for risk analysis of financial derivatives.
- © 2021 The Authors. Published by Atlantis Press International B.V.
- Open Access
- This is an open access article under the CC BY-NC license.
Cite this article
TY - CONF AU - Yulin Liu AU - Jiayi Lu AU - Shihang Wu AU - Jiaqi Xu PY - 2021 DA - 2021/12/15 TI - Risk Analysis of Enterprise Financial Derivatives: Evidence from MGRM Company BT - Proceedings of the 2021 3rd International Conference on Economic Management and Cultural Industry (ICEMCI 2021) PB - Atlantis Press SP - 1036 EP - 1041 SN - 2352-5428 UR - https://doi.org/10.2991/assehr.k.211209.168 DO - 10.2991/assehr.k.211209.168 ID - Liu2021 ER -