Explain the underlying causes and the extent to which derivatives markets and risk management techniques contributed to the followings:
a) Liquidity crisis that began in 2007 (2000 words)
b) Orange County crisis. (1500 words) References: You are expected to collect the relevant material and read widely including Buckley, Adrian (2011). Financial crisis: causes, context, and consequences. Financial Times Prentice Hall Valdez, S and P. Molyniux (2010). Global Financial Markets, Chapter 9. Palgrave Macmillan. (Also a copy in the School). Kolb, R. W. (2010). Lessons from the Financial Crisis. John Wiley. (Also a copy in the School). Pilbeam, K. (2010). Finance and Financial Markets, Chapter 17. b) Philippe Jorion (1995). Big bets went bad. Academic Press. (HJ3835.C2J7) Mark Baldassare (1998). When the Government fails. The Orange County Bankruptcy. University of California Press. (HJ3835.C2B2) Nicholas Bunbar (2005). Inventing Money. John Wiley. John Marthinsen, (2009). Risk Takers. Pearson/Prentice Hall.
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