Answer:
$930.89
Explanation:
The Notional value of position = Price of S&P-500 index future x Contract multiplier x no. of contracts
= 950x250x10
=$2,375,000
Margin = Total nominal value of position x Initial margin
=2375,000x10%
=$237,500
b) Maintenance margin = Initial margin x Maintenance margin
=237500 x 80%
=$190,000
Margin call will be receive when value of the Initial margin falls below maintenance margin
Thus 237500e^0.06/52 + (St -950) x250 x10 <190,000
From here St = price at which margin call will be made
=237500e^0.0011538 + (St -950) x 2500 <190,000
=237500(1.0011538) + (St -950) x 2500 <190,000
=237774.04 + (2500St - 2375000) < 190,000
=2500St - 2137226 <190,000
= 2500St <2327226
St < 930.89
Thus price below $930.89 will be called maintenance margin.
Answer:
BEP : 500 units
Profits : R2000
Explanation:
BEP or break-even point = fixed costs/ contribution margin per unit.
Fixed costs = R2000
Contribution margin per unit = selling price - variable costs
Contribution margin per unit = R12- R8 =R4
BEP = 2000/4
BEP = 500 units
profits will be the units sold after BEP x contribution margin
=1000-500
=500
profits will be
=500 x 4
=2000
Answer:
market premium = 0,0781 = 7.81%
Explanation:
We have to calculate the market return and then calcualte the premium as the difference between the expected return on the market and the risk-free rate:
We multiply each outcome by the stock weight. and then for the probability of occurence of that state of economy
Calculations for boom:
Change of boom x (weighted outcome A + weighted outcome B + weighted outcome C)
0.25 x (0.45 x 0.15 + 0.45 0.27 + 0.1 x 0.05) = 0.05
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market expected return 0,1191
Market premium: 0,1191 - 0,041 = 0,0781
Answer:
pricing low
yes
Explanation:
Game theory looks at the interactions between participants in a competitive game and calculates the best choice for the player.
Dominant strategy is the best option for a player regardless of what the other player is playing.
Nash equilibrium is the best outcome for players where no player has an incentive to change their decisions.
if either firm charges high, they either earn 11 million or 2 million.
if either firm charges low, it would earn either 15 million or 8 million.
because the payoffs of charging low is higher than the payoffs of charging high, the best strategy is for the firms to charge low if there is no cooperation.
the game is a prisoners dilemma because the choice the firms make isn't the choice that will yield the highest payoffs. the choice that would yield the highest payoffs is to both charge high prices.
Answer:
d. Overstate, understate, understate, zero
Explanation:
The amount of earnings overall is the same. so, in the end, there is n difference in retained earnings.
But, on accrual accounting, the note should not enter the accounting as 1,000 as time value of money exist.
At 2016 the sales revenue should be the present value of 1,000 dollars not the complete 1,000 dollars. Thus, is overstated.
Then, the interest accrued from the note are not recognized. Thus, the first year (2016) recognize revenues that should be matched with 2017 and 2018
Thus, these two subsequent years ended understated.
