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VLD [36.1K]
2 years ago
5

You just sold a futures contract on €. Each contract is for €125,000 and the price you sold for the € is $1.20 for each €. What

is your profit/loss if the spot rate when the contract matures is $1.10?
Business
1 answer:
Yuliya22 [10]2 years ago
3 0

Answer:

The profit is $12,500

Explanation:

The profit on the contract can be computed using the formula below:

profit/loss on the contract=(forward price-spot rate)*volume of currency sold

forward price is 1 euro to $1.20

spot price     1 euro to  $1.10

volume of currency sold is Euros 125,000

profit/loss on the contract=($1.20-$1.10)*125,000

                                             =$12,500

Invariably the trader sold each US dollar $0.10 more than the spot rate ($1.20-$1.10),when that is multiplied the volume of Euros sold,it gives $12,500 in profit.

This implies that the buyer could have bought the currency cheaper on contract date

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Shifting from producing 500 scarves and 225 sweaters, to producing 100 scarves and 350 sweaters would
Margarita [4]

Answer:

A) result in an inefficient use of resources

Explanation:

Formerly, the company was producing 500 scarves and 225 sweaters with the available resources. However, they shifted to producing 100 scarves and 350 sweaters with no mention of change in raw materials.This means that the production capacity when down even with the availability of  initial raw material.

4 0
3 years ago
Read 2 more answers
Your company's health insurance plan costs $585 per employee per month. There are 64 employees. Another health insurance company
Novay_Z [31]

Answer:

$44, 928

Explanation:

There are 64 employees in the company.

each employee costs $585 per month.

The total cost for all 64 employees per month will be

=64 x $585

=$37,440

The annual expenditure of employees insurance

= Monthly costs  x 12

=$37,440 x 12

=$449,280

A 10 percent savings will be

=10/100 x $449,280

=$44, 928

5 0
3 years ago
What are forms of phishing?
Afina-wow [57]
Deceptive, malware-based, session hijacking, and data theft are all forms of phishing,
5 0
3 years ago
Tamekia reports that the market leader in the TZX mitt category has 60 percent of all sales in the market and spends $240,000 a
Zina [86]

Answer: $120000

Explanation:

Share of voice refers to the measure of the exposure that a particular business gets when it's being compared to other competitors. The share of market is the percentage of a market that a company earns.

From the information given, since 60% of the market sales equate to $240000 spent a year, then in order to achieve a market share of 30%, ½ of $240000 will be spent which is $120000. Therefore, Great Catch should be prepared to spend at least $120000 if it hopes to achieve a market share of 30 percent.

7 0
2 years ago
Toys Unlimited has the following cost data available. Direct Materials are $99 per unit. Direct Labor is $55 per unit. Variable
r-ruslan [8.4K]

Answer:

c. $229

Explanation:

To compute the total absorption cost per unit we do the following,

Absorption of fixed costs = Fixed costs / units produced

Absorption cost = 200,000 / 4000 = $50/unit

Total cost of each individual unit = 99 + 55 + 25 + 50 = $229

This includes direct material, direct labor, manufacturing overhead and the fixed absorption cost.

With absorption costing we take all the goods produced in a period as denominator for the Fixed costs.

Hope that helps.

5 0
3 years ago
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