Answer:
0.9; 100 million; 90 million; 2,143
Explanation:
The new fuel's price change has a standard deviation that is 50% greater than price changes in gasoline futures prices.
So, if standard deviation of future prices is taken as '1' then for spot price it will be 50% higher, i.e 1.5
The hedge ratio:
= Correlation × (standard deviation of spot price ÷ Standard deviation of future prices)
= 0.6 × (1.5 ÷ 1)
= 0.9
The company has an exposure of 100 million gallons of the new fuel.
Gallons in future gasoline:
= Hedge ratio × 100 million gallons of the new fuel
= 0.9 × 100
= 90 million
Each contract is on 42,000 gallons, then
Number of gasoline futures contracts should be traded:
= 90,000,000 ÷ 42,000
= 2,142.9 or 2,143
Answer:
As we know the internal controls are not effective after a passage of time because there are familiarity threats which might result in the unethical behavioral implications. So to prevent or detect the management unethical behavior, we can do the following things:
Segregation of Duties
Checking the effectiveness of the internal control after every year or semi year.
Using only company bank account for all the payments and receipt.
Redesigning policies of the organization to ensure effective working of the internal controls.
Bank reconciliation at the month end
Answer:
The correct answer is letter "A": it would reduce the lags inherent in monetary policy.
Explanation:
Inflation targeting is a monetary policy in which the central bank sets a specific target for medium-term inflation and declares the target for inflation. The idea is that maintaining price stability is the best that monetary policy can do to support the economy in the long run.
Answer:
The statement is: True.
Explanation:
A data custodian is responsible for storing and give proper use to specific types of information. This character appears at the governance level of safe-keeping data. Typically, the information the custodian guards is related to businesses and general IT (Information Technology).
