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iren2701 [21]
1 year ago
7

Bea Moran wants to establish a long derivatives position in a commodity she will need to acquire in six months. Moran observes t

hat the six-month forward price is 45.20 and the six-month futures price is 45.10. This difference most likely suggests that for this commodity:
Business
1 answer:
Marianna [84]1 year ago
4 0

Bea Moran wants to establish a long derivatives position in a commodity she will need to acquire in six months. Moran observes that the six-month forward price is 45.20 and the six-month futures price is 45.10. This difference most likely suggests that for this commodity: futures prices are negatively correlated with interest rates.

This is further explained below.

<h3>What are interest rates?</h3>

Generally, the fraction of a loan that is charged as interest to the borrower is often stated as a yearly percentage of the loan outstanding.

"lower interest rates encourage people to spend money on house upgrades"

In conclusion, Bea Moran would want to construct a long derivatives position in a commodity that she will need to buy in a little over half a year's time. Moran notes that the price of the six-month forward contract is now at 45.20, while the price of the six-month futures contract is currently at 45.10. Because of this disparity, it is quite probable that the prices of futures contracts for this commodity have an inverse relationship with interest rates.

Read more about interest rates

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Answer:

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Explanation:

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As for portfolio assets that are well diversified, the best measure would be beta because diversified portfolios deal with systematic risk and beta shows the movement of the portfolio in relation to the market and so will show that systematic risk.

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STatiana [176]

Answer:

Explanation:

Rule 70 is used to estimate how long it tales a cashflow amount to double.

The formula is as follows ;

Number of years = 70 / growth rate

<u>At 1.4% growth rate;</u>

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<u>At 3.2% growth rate;</u>

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<u>At 4.9% growth rate;</u>

Number of years = 70 / 4.9 = 14.29

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<u>At 7.5% growth rate;</u>

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4 0
3 years ago
Using the word “CAPITALISM,” create an acrostic poem that demonstrates your understanding of the term. Feel free to come back an
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Answer:

Capitalism is an economic system based on investing money in the expectation of making a profit. The means of production are usually privately owned by private entrepreneurs who often use wage labor to create added value. In doing so, they enjoy a great deal of legal freedom to dispose of these means, free enterprise production. This freedom also means that there is competition, which means that entrepreneurs have an interest in increasing the efficiency of their company. Hence, the capital owner will not fully consume the profit but reinvest in the business and capital accumulation takes place. The distribution of products is regulated by the market, in which the role of the government is, in principle, limited to that of market master.

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Bill signs a check payable to the order of City Bank, filling in the blanks for the amount with the figures "$100" and "One thou
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