This website uses cookies to ensure you have the best experience. Learn more

Mg Case Study

921 words - 4 pages

MG case study

I. What was the business model for MG? What were they trying to do?
MG is a traditional metal company. Last four years, it has evolved into a provider of risk management services. MGRW is one of its subsidiaries in “Energy Group” and is in charge of refining and marketing petroleum products in the U.S.
MGRM committed to sell certain amounts of petrolun every month for as long as 10 years at fixed prices which were set in 1992. The futures contracts MGRM used to hedge were the unleaded gasoline and the No. 2 heating oil. They used a “stack” hedging strategy, which placed the whole hedge in short-dated delivery months because of sell-back options. MGRM also longed some West ...view middle of the document...

III. What risks were they taking on? What could go wrong? What went wrong?
First, MG was exposed to funding risk. When the price of oil went down, MG lost money for taking the long position in futures, while the value of their forward contracts actually increased. It seems that their gain in the forward contracts would offset their loss in future market. However, the problem was that the loss in their hedge position led to margin calls. Although they made money on forward contracts, no cash would be received till the exercise on the contracts. Therefore, they met a problem cash flow and ultimately cannot meet the margin calls.
Second, MG had the basis risk. MG entered into many forward contracts with different maturities. The mismatches in maturity resulted in basis risk.
MG also faced reporting risk because of Germany’s different accounting methodologies. According to Germany’s accounting standards, MG was required to record the current losses in hedging but cannot recognize the gains in forward contracts. Finally, their income statement became terrible and negatively affected their credit rating and increased their capital requirement to maintain the position.
The above risks exposed MG to dangers. What actually happened is as follows:
MG took long position in futures therefore faced risk of rising price of oil. In order to hedge this risk away, MG used the stacked hedging strategy, but unfortunately, the price of oil went down and caused problem in liquidity. It turned out that MG lacked enough funds to keep their position, which was one of the main causes of their financial distress.
Moreover, oil market is normally a backwardation market....

Other Essays Like Mg Case Study

Noe Seemta Fre Shitani Essay

1068 words - 5 pages COPD Case Study Part 1 Patient name: DH DOB: 7/14 Admit Date: 8/23 Age: 65 Sex: Male Education: Bachelor's degree Occupation: Retired manager of local grocery chain Hours of work: N / A Household members: Wife age 62, well; four adult children not living in the area Ethnic background: Asian American Religious affiliation: Methodist Referring physician: Marie McFarland, MD (pulmonary) Chief complaint: "My husband has had

Case Study Cp

1025 words - 5 pages Nursing 106 Spring 2016 Maternal Child Case Study All questions apply to this case study. You may type or clearly write this assignment. It must be legible. Responses to questions must be in your own words. Scenario M.H. is a three year old boy with cerebral palsy (CP) who has been admitted to your unit preoperatively. He will have surgery for a femoral osteotomy and tendon lengthening to stabilize hip joints and to help reduce

Investigation of Caffeine Content Level of Top 5 Commercially Available Coffee Products Used by Msu Chs Students and Its Effect on Cognitive Performance

4936 words - 20 pages is closer to 85mg. There's probably less caffeine in a cup of tea - one study showed a median of 27mg per cup with a range of 8 to 91 mg. An ounce of sweet chocolate may contain between 75 and 150mg of combined methylxanthines and a cup of chocolate or chocolate milk may contain 150-300mg. The principal dietary sources of caffeine are overwhelmingly coffee and tea. Coffee accounts for some 54 per cent of ingested caffeine, while tea accounts

Cymbaltamkamara

1266 words - 6 pages Cymbalta case Analysis Mohamed A. Kamara AMBA 650: Marketing Management and Innovation January 22, 2013 Table of Contents 1.0. Identification of the strategic issues and problems. 2.0. Analysis and evaluation. 3.2. Recommendations. 1.0. Identification of the strategic issues and problems. In April 2000, Eli Lilly’s New Antidepressant Team (NAT) convenes to review the potentials of alternative medications, and to subsequently adopt

Methods of Research Paper

1327 words - 6 pages success at beating their addiction than people who continue with methadone alone. . Sampling Method According to the American Gastroenterological Association (2015), during patient sampling, the sample surveyed must represent the patient population under study. In this case, the first approach to sampling patients is identifying the patient characteristics. In this research, the patients under the study will be those who have continued their

Buy Pristiq Online

1998 words - 8 pages life. Pristiq Case Study Mr.Bertrand’s wife unexpectedly told him that she wanted a divorce, he felt devastated. There was a question of two small children. Eventually he did some research about how to deal with the situation and his medical practitioner prescribed him Pristiq 20 mg after having been on treatment for more than one month. It seemed to be great relief. He is absolutely fine ever since. He had not experienced any negative effects

Case Study: Proton

688 words - 3 pages Case Study: Proton Syllabus elements: 2.3, 2.4, 3.5, 3.6, 3.7, 3.8, 3.9, 3.10, 3.11 Proton is an abbreviation of the Malay for “National Automobile Enterprise”. The company was formed in 1983 under the direction of Malaysia’s Prime Minister as a manufacturer of cars, largely from Mitsubishi designs. At first the cars were simply assembled from parts imported from Japan, but within a few years, as the Malaysian manufacturing infrastructure

Walt Disney Case Analysis

1139 words - 5 pages DISNEY CASE PREPARED BY RYAN MENZIES September 29, 2013 FOR OL 421 STRATEGIC MANAGEMENT AND POLICY INTRODUCTION: The Walt Disney Corporation was founded on October 16, 1923 by brothers Walt and Roy Disney. They were primarily an animation studio before expanding their operations to include other ventures. The company became publicly traded on May 6, 1991 on the Dow Jones Industrial Average. The company has come under some criticism

Walt Disney Case Study

3140 words - 13 pages Case study Walt Disney By Ilia Natchev February 3rd 2013 Strategic Management Introduction The Walt Disney Company represents

Case Study

790 words - 4 pages NURSING CASE STUDY TYPE 2 DIABETES MELLITUS WITH NEUROPATHY, CAP, NEUROGENIC BLADDER I. HEALTH HISTORY A. DEMOGRAPHIC DATA 1. Client’s name or initial (optional): J. L. 2. Gender: Female 3. Age, Birthdate and Birthplace: 81 years old 10/20/1932 San Clemente, Tarlac 4. Marital Status: Widowed 5. Race and Nationality: Filipino 6. Religion: Catholic 7. Address

Chikungunya Disease

969 words - 4 pages associated with chikungunya, and as an anti-inflammatory agent to combat the arthritis associated withchikungunya virus. A University of Malaya study found that for arthritis-like symptoms that are not relieved by aspirin and non-steroidal anti-inflammatory drugs (NSAID), chloroquine phosphate (250 mg/day) has given promising results. There is a debate about the appropriateness of chloroquine as treatment for chikungunya. Unpublished studies in cell

Related Papers

Bmw’s Purchase Of Mg Rover Essay

1429 words - 6 pages INTRODUCTION International automobile industry has seen a lot of mergers and acquisitions for last two decades, as companies were trying to grow, get access to new technologies, achieve increasing economies of scale, as well as entry new markets and segments through becoming full-line producers. However, in fact, auto mergers and alliances failed at least as often as they succeed. MG Rover was a company that had been formed through a serious

Corporate Governance Essay

1204 words - 5 pages failures of MG and applying correction to managers in the future. This information is vital not only on ethical practice in business but also on the value of corporate governance. In addition, it is found out that there is need for providing the stakeholders with source material in regard to the case of German corporate governance practices. However, the measure of MG and the size of the bank stakes in the MG argues that the relationship was enough to

Complete Heart Failure Essay

931 words - 4 pages . She also may not have an adequate understanding of what a "fluid" restriction diet entails. CASE STUDY PROGRESS During the admission interview, the nurse makes a list of the medications M.G. took at home. * Chart View Nursing Assessment: Medications Taken at Home Enalapril (Vasotec) 5 mg po bid Pioglitazone (Actos) 45 mg po every morning Furosemide (Lasix) 40mg/day po Potassium Chloride 20meq/day po 2. Which of these

Removal Of Methylene Blue And Malachite Green Dye Using Different Form Of Coconut Fibre As Absorbent

4247 words - 17 pages , particularly in the case of people [23]. Malachite green dye (MG) is an Nmethylated diaminotriphenylmethane dye. Malachite green dye is a green crystal powder with a metallic lustre. Malachite green, are toxic and must be removed before discharge into receiving streams. MG is one such dye used extensively in textile industry for dyeing silk, leather, cotton, wool and jute. It is also extensively used as a bactericide, fungicide and parasiticide in