All categories

10 months ago

hedging, or reducing risk, is the same as adding value or return to the firm. group of answer choices true false

Business

1 answer:

pychu [463]10 months ago

4 0

false Hedging, or lowering risk, is the same as increasing the firm's value or return.

<h3>How might currency risk be reduced through hedging?</h3>

hedging to reduce the risk of currency loss. Foreign exchange risk is an unavoidable reality for businesses doing business in other countries, although hedging can help reduce the risk. By taking a contrary position in a comparable asset, the hedging technique seeks to reduce risks associated with financial assets.

<h3>What does hedge mean?</h3>

A approach for reducing the risks associated with financial assets is hedging. It uses market tactics or financial instruments to reduce the risk of any unfavorable price changes. To put it another way, investors use a trade in another investment to protect one investment.

To know more about hedging, or reducing risk, visit:-

brainly.com/question/21600180

#SPJ4

You might be interested in

Present value with periodic rates. Sam Hinds, a local dentist, is going to remodel the dental reception area and add two new w

rusak2 [61]

Answer:

What will Sam have to pay for this equipment if the loan calls for semiannual payments (2 per year)

$2,820.62

and monthly payments (12 per year)?

$531.13

Compare the annual cash outflows of the two payments.

total semiannual payments per year = $2,820.62 x 2 = $5,641.24
total monthly payments per year = $531.13 x 12 = $6,373.56

Why does the monthly payment plan have less total cash outflow each year?

The monthly payment has a higher total cash outflow ($6,373.56 higher than $5,641.24), it is not lower. Since the compounding period is shorter, more interest is charged.

What will Sam have to pay for this equipment if the loan calls for semiannual payments (2 per year)?

$2,820.62 x 12 payments = $33,847.44 ($25,000 principal and $8,847.44 interests)

Explanation:

cabinet cost $25,000

interest rate 10%

we can use the present value of an annuity formula to determine the monthly payment:

present value = $25,000

PV annuity factor (5%, 12 periods) = 8.86325

payment = PV / annuity factor = $25,000 / 8.8633 = $2,820.62

present value = $25,000

PV annuity factor (0.8333%, 60 periods) = 47.06973

payment = PV / annuity factor = $25,000 / 47.06973 = $531.13

5 0

3 years ago

Lauren plans to deposit $5000 into a bank account at the beginning of next month and $175/month into the same account at the end

Serhud [2]

Answer:

$12,053.86

Explanation:

The easiest way to calculate this is using an excel spreadsheet and the future value function. Using the FV function =FV(rate,nper,pmt)

rate = 3%/12 = 0.25%
nper = 36
pmt = 175

This function will give us the future value of the annuity =FV(0.25%,36,175) = $6,583.60

Now we must add the future value of the original $5,000:

future value = $5,000 x (1 + 0.0025)³⁶ = $5,470.26

total future value = $6,583.60 + $5,470.26 = $12,053.86

if you do not want to use an excel spreadsheet, you can use the following formula:

F = P x ([1 + r]ⁿ - 1 )/r

F = 175 x [(1 + 0.0025)³⁶ - 1] / 0.0025 = $6,583.60

the answer will be the same

3 0

3 years ago

Marginal cost-benefit analysis and the goal of the firm Ken Allen, capital budgeting analyst for Bally Gears, Inc., has been

True [87]

Answer:

1) The marginal (added) benefits of the proposed new robotics.

560,000 - 400,000 = 160,000

2) The marginal (added) cost of the proposed new robotics.

220,000 - 70,000 = 150,000

3) The net benefit of the proposed new robotics.

160,000 - 150,000 = 10,000

4) What should Ken recommend that the company do? Why?

Replace the existing robotics because the net profit is positive

5) What factors besides the costs and benefits should be considered before the final decision is made?

A. Whether there will be additional training necessary with the new robotics.

B. Whether even better robotics may be available in a short while.

C. What will be the energy consumption of the new robotics.

5 0

2 years ago

2019 2018 2017 2016 2015 Sales $ 672,736 $ 439,697 $ 356,030 $ 248,972 $ 185,800 Cost of goods sold 352,273 230,192 188,636 130,

drek231 [11]

Answer:

2019 2018 2017 2016 2015

Sales 362 237 192 134 100

Cost of goods sold 365 238 195 135 100

Accounts receivable 254 202 191 114 100

Explanation:

Note: See the attached excel file for the table showing how the trend percents are calculated.

Trend percents, often known as index numbers, can be described as percents that are used for comparing financial data across time to a based year or period. This can be calculated using the following formula:

Trend percents = (Analysis year amount / Base year amount) * 100 ........ (1)

Using equation (1), the following table shows the trend percents computed as follows:

2019 2018 2017 2016 2015

Sales 362 237 192 134 100

Cost of goods sold 365 238 195 135 100

Accounts receivable 254 202 191 114 100

Download xlsx

4 0

3 years ago

Hutter Corporation declared a $0.50 per share cash dividend on its common shares. The company has 30,000 shares authorized, 15,0

Natasha_Volkova [10]

Answer:

Dr Retained Earnings $6,000

Cr Common Dividends Payable $6,000

Explanation:

Preparation of the journal entry to record the dividend declaration

Based on the information given we were told that the Corporation declared the amount of $0.50 per share cash dividend on common shares in which 12,000 shares of the common stock are outstanding, hence The journal entry to record the dividend declaration is:

Dr Retained Earnings $6,000

Cr Common Dividends Payable $6,000

(12,000*$0.50)

5 0

2 years ago