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vodka [1.7K]
3 years ago
13

One Chicago has just introduced a new single stock futures contract on the stock of Brandex, a company that currently pays no di

vidends. Each contract calls for delivery of 1,000 shares of stock in one year. The T-bill rate is 6% per year.
a. If Brandex stock now sells at $120 per share, what should the futures price be?



b. If the Brandex stock price drops by 3%, what will be the change in the futures price and the change in the investor’s margin account?



c. If the margin on the contract is $12,000, what is the percentage return on the investor’s position?
Business
1 answer:
bekas [8.4K]3 years ago
5 0

Answer:

A: $127.2

B: $123.384, $3.816 per share and $3,816 per contract

C: 9.43%

Explanation:

A: Futures price

F° = S° (1 + rₙ) = $120 x 1.06

= $127.20

B: Change in Future Price and Investor Margin account:

New Spot = $120 (1 – 0.03)

= $120 x 0.97

= $116.40

New Futures = $116.40 (1.06)

= $123.384

The long investor loses = $127.20 - $123.384

= $3.816 per share

or $3.816 (1,000) = $3,816 per contract

C: Percentage return on the investor’s position:

Percentage return = $12,000 / $127,200

= 9.43%

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Explanation:

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Previous cost = $640000

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Less: Fixed cost = $96000

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7 0
2 years ago
what is the white-box approach in auditing systems? select all statements that apply. multiple select question. the white-box ap
ira [324]

The white-box approach in auditing systems are :-

It is adequate when automated systems applications are relatively simple.

It is to audit around the computer.

The advantage of this approach is that the systems will not be interrupted for auditing purposes.

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An audit is an "unbiased exam of financial facts of any entity, whether or not earnings oriented or not, no matter its length or legal form while such an exam is carried out on the way to specific an opinion thereon.”

The reason of an audit is to shape a view on whether the records presented within the financial record, taken as a whole, reflects the monetary function of the company at a given date.

Learn more about auditing here : brainly.com/question/24317218

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4 0
1 year ago
Answer the following questions​ (a) at zero output level if total cost is​ $100 what will be values of total variable cost and t
mr_godi [17]

Answer:

(a) Total fixed cost is equal to $100, while total variable cost is equal to $100.

(b) Total cost = $165; Average total cost = $41.25; Average fixed cost = $25; and Average variable cost = $16.25

Explanation:

A fixed cost is a cost that does not change as the output changes. It is usually incurred before production starts and it continues to be incurred when there is a production stoppage. It includes cost on plant and machinery, building, etc.

A variable is a cost that changes as output changes. It is not incurred when there is a production stoppage. It includes cost of material and labour.

Based on this we can answer the question as follows:

(a) at zero output level if total cost is $100 what will be values of total variable cost and total fixed costs

At zero output level, fixed cost is equal to total cost. Therefore, total fixed cost is equal to $100.

At zero output level, no variable cost will be cost. Therefore, total variable cost is equal to $100.

(b) At 4 units of output values of total fixed cost and total variable cost are $100 and $65 respectively. What are values for total cost, average total cost, average fixed cost and average variable cost?

Total cost = Total fixed cost + Total variable cost = $100 + $65 = $165

Average total cost = Total cost/Units of output = $165/4 = $41.25

Average fixed cost = Total fixed cost/Units of output = $100/4 = $25

Average variable cost = Total variable cost/Units of output = $65/4 = $16.25 .

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Answer:

B) Anticipatory Grief

Explanation:

As Khalid has found out that his friend Jason is terminally ill. This has made him feel sad and lonely at the thought of living life without his friend. Khalid's feelings best represent the concept of anticipatory grief which refers to the feeling of sadness and grief occurring before the actual happening of that loss. We become sad and emotional even before the actual happening of some incident. For example, when our dear friend is in hospital after a sever accident, then we start feeling this anticipatory grief that the chances are more that he will be dead soon so we feel more grief and sadness.

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Answer:

a. The division of activities into unit level, batch level, product sustaining level and facility level categories is commonly known as cost.

Explanation:

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