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Natalija [7]
3 years ago
8

cattle farmer expects to harvest 100K live cattle, there is a futures contract for delivery of 40k cattle. Explain how farmer ca

n use this to hedge his position
Business
1 answer:
kap26 [50]3 years ago
4 0

Answer:

The question does not mention when does the farmer has to sell the cattles in the future. So assuming the cattles are to be sold in the next 3 months.

The farmer can short 3 contracts that have 3 months to maturity. Two contracts would be of the 40k cattles whereas one of 20k.

Explanation:

When the prices of the cattles falls in the future, the gain on the futures contract will offset the loss on the sale of the cattle. Whereas, when the prices of cattle rises in the future, the gain on the sale of the cattle will be offset by the loss on the futures contract.

So basically, using futures contracts to hedge has the advantage that it can at no cost reduce risk to almost zero.

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Creating a chant that rhymes to remember information is a memorization technique.
jolli1 [7]

Answer:

OT

Explanation:

BECAUSE I AM SMART AND BECAUSE I TOOK THAT SAME CLASS

6 0
3 years ago
As a product in the maturity stage of its life cycle, chewing gum brands would most likely require the use of ________ advertisi
Nutka1998 [239]

Answer:

The answer is reminder

Explanation:

Reminder advertising is used by a known brand or firm to remind or to make them not to forget a product. Sometimes, additional benefits can be added to an already known product. Reminder advertising is essential here.

Reminder advertising is used to elongate the life-cycle of a product. Products in their maturity stage should be given additional benefits to be able to make them competitive.

4 0
3 years ago
A title clause in a contract provides exactly what type of title the buyer is expecting to receive from the seller: Group of ans
damaskus [11]

Answer:

True

Explanation:

A retention of title clause within a contract of sale essentially means that ownership remains with the supplier, until full payment for the goods has been received. That is the seller of a particular product still holds full custody of his goods until the buyer fully pays for the goods.

3 0
3 years ago
A proposed project has an initial cost of $38,000 and cash inflows of $12,300, $24,200, and $16,100 for years 1 through 3, respe
In-s [12.5K]

Answer:

IRR is greater than required return by 17.38 - 16.8 % = 0.58 %

so project will accept

Explanation:

given data

initial cost = $38,000

cash inflows year 1 =  $12,300

cash inflows year 2= $24,200

cash inflows year 3 = $16,100

rate of return = 16.8 %

solution

we consider here IRR is = x so

present value of inflows is equal to present value of outflows   .............1

we can say that it as

initial cost = present value

3800 = \frac{12300}{1*x} +\frac{24200}{(1*x)^2} +\frac{16100}{(1*x)^3}

solve it we get

x = 17.38%

here IRR is greater than required return by 17.38 - 16.8 % = 0.58 %

so project will accept

4 0
3 years ago
____ is a method for overcoming resistance to organization change. a. Automation b. Centralization c. Management by exception d.
DedPeter [7]

Based on the information given, it can be deduced that the method of overcoming resistance that's illustrated is known as D. Force-field analysis.

Force-field analysis simply means the framework of looking at the factors that resulted in a particular situation. It's vital in knowing the root cause of an issue.

It should be noted that force-field analysis can either drive the movement towards a goal or block the goal. It's a method for overcoming resistance to organizational change.

Learn more about an organization on:

brainly.com/question/24398796

6 0
2 years ago
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