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Ganezh [65]
3 years ago
12

A perfect hedge (full coverage) on translation exposure can usually be achieved when which of the following occurs? a. Using a f

orward hedge. b. Using a money market hedge. c. Using a futures hedge. d. All of the above would work to accomplish this purpose. e. None of the above, because a perfect hedge does not exist.
Business
1 answer:
attashe74 [19]3 years ago
6 0

Answer:

e). None of the above, because a perfect hedge does not exist

A perfect hedge is nearly impossible

Explanation:

A perfect hedge is a position undertaken by an investor that would eliminate the risk of an existing position, or a position that eliminates all market risk from a portfolio. In order to be a perfect hedge, a position would need to have a 100% inverse correlation to the initial position.

At the time of taking an opposite position in Derivatives Market, Perfect Hedge would mean covering the risk involved in the Cash Market Position completely, i.e. 100%. 2. Imperfect Hedge: When the position in the cash market is not completely hedged or not hedged to 100%, then such a hedge is called Imperfect Hedge.

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Assume that the market for pencils is perfectly competitive. The market equilibrium price is $0.50 and Perry's Pencil Company ha
Nata [24]

The marginal revenue is $0.5 which is being earned if the company sells one more pencil.

<h3>What is total revenue?</h3>

Total revenue is the amount being obtained by the firm after selling the goods and services in the market.

Given values:

Quantity sold: 10,000 units

Marginal quantity: 10,001 units

Equilibrium price: $0.50

Computation of marginal revenue earned:

\rm\ Marginal \rm\ revenue=\frac{ \rm\ Additional \rm\ revenue-\rm\ Total \rm\ revenue}{\rm\ Total \rm\ quanitiy - \rm\ Additional \rm\ quantity} \\\rm\ Marginal \rm\ revenue=\frac{ 10,001 \times\ \$0.50 - 10,000 \times\ \$0.50}{10,001-10,000} \\\rm\ Marginal \rm\ revenue=\frac{\$5,000.50-\$5,000}{1} \\\rm\ Marginal \rm\ revenue=\$0.50

Therefore, when the company sells one more pencil then it earned a marginal revenue of $0.50.

Learn more about the marginal revenue in the related link:

brainly.com/question/13563292

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6 0
1 year ago
Which of the following is an element of economic forces? a) New production forces b) Health, food, stress c) Competitors and sup
Ksju [112]

Competitors and supply chain is an element of economic forces.

<h3>What are economic forces?</h3>

Economic forces are those factors that assist a firm in terms of its competitiveness in the environment it operates.

Here, economic forces have a direct impact on business and are essential factors that can help an organization in accomplishing its targets.

Learn more about economic forces here: brainly.com/question/13721949

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4 0
2 years ago
Valuing Trading Securities at Fair Value On January 1, Valuation Allowance for Trading Investments had a zero balance. On Decemb
Artist 52 [7]

Answer:

Dr. Trading securities                                    $4,800  

Cr. Unrealized gain on trading securities    $4,800

Explanation:

Trading securities are recorded reported on the fair market value. The gain or loss arise from the increase or decrease in the value of trading securities. There is a gain if the price of trading security increases and loss when the price of the trading security decreases. Unrealized gains are reported in the separate section of stockholders equity.

Gain on Trading securities = Fair value of security portfolio - Cost of security portfolio = $46,300 - $41,500 = $4,800  

6 0
3 years ago
Applet Systems is a​ start-up company that makes connectors for​ high-speed Internet connections. The company has budgeted varia
Marysya12 [62]

Answer:

Applet's flexible budget variance for total costs is $5,140  unfavorable variance since actual is higher than budgeted cost

Explanation:

Flexible budget variance for total costs=actual total costs-budgeted total costs of 72 connectors

actual total costs of 72 connectors=$19,000

budgeted total costs of 72 connectors=budgeted fixed cost+budgeted total variable cost of 72 connectors

total budgeted variable cost=72*$130=$ 9,360.00  

budgeted fixed cost is $4,500

Budgeted total costs of 72 connectors=$9,360.00+$4,500.00=$ 13,860.00  

Flexible budget variance =$ 13,860.00-$19,000.00=$5140  unfavorable variance

5 0
3 years ago
FitWear Inc., a sporting goods footwear and apparel company, features photographs of celebrities wearing its brand of clothing a
Volgvan

Answer:

opinion leaders

Explanation:

Since in the question it is mentioned that the Fitwear Inc i.e. a footwear of sporting products and apparel company also it established a new line of football cleats. In addition to this, they also believes that celebrities could influence the buying decision of the customers so here the football stars would be represent as an opinion leaders as they are considered as an individual that influence the people in general

5 0
3 years ago
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