Answer:
Option C is correct.
<u> When the game will be repeated infinitely.</u>
Explanation:
The collaborations will undoubtedly work in a repeated prisoners' dilemma game when the game will be rehashed infinitely.
A rehashed detainees problem games alludes to a game technique wherein the game is either rehashed finitely or infinitely..
The collaborations choose to work with boundlessly rehashed games by participating and embracing a socially ideal methodology.
The principle point of cooperations is to expand their settlements in future and this is conceivable just through the selection of the interminably rehashed game system in which they need to co-work endlessly with different firms.
As per this gaming procedure, if any of the Cooperation or firm digresses from the agreeable system, they will get decreased settlements in future.
Answer:
To hedge the preferred stock position, the manager should: Buy tyx calls
Explanation:
When market interest rate rise preferred stock drop. To hedge using interest rate index option, <em>the contract must offer an offsetting profit during a period of rising interest rates. Therefore buy TYX calls. </em>These will continue to give ever increasing profit as market interest rate continue to rise. And it will offset the ever increasing loss that would be incurred on the XYZ preferred stock position as the market interest rate continues rising.
The hedge is that Any loss on preferred stock position would be offset by corresponding gain on the long interest rate index call position.
Answer:
<u>low opportunity cost</u>
Explanation:
<u>Opportunity cost</u> is described as a process in which an individual sacrifices something when they tend to choose one thing or option over another option or thing.
<u>Low opportunity cost: </u>The term "low opportunity cost" is determined as the possibility of an individual's chosen investment returns to be lower than the forgone investment's returns.
Answer:
Consider the following calculations
Explanation:
a) If the weight of risky portfolio is 'y' then weight of T-bill would be (1-y).
Expected return on clients portfolio = weight of risky portfolio x return on risky portfolio + weight of T-bill x return on T-bill
or, 15% = y x 17% + (1 - y) x 7%
or, y = 0.8
weight of risky portfolio = 0.8, weight of T-bill = 0.2
b)
Security Investment Proportions
T-bill 20% (from part a)
Stock A 80% x 0.27 = 21.6%
Stock B 80% x 0.33 = 26.4%
Stock C 80% x 0.40 = 32%
Total 100%
