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Fiesta28 [93]
3 years ago
13

John Q. Investor manages an equity portfolio with a market value of $3,000,000. The portfolio beta is 1.6. John Q. finds this so

mewhat overly aggressive for the client's risk profile and sells 25 DJIA futures contracts. The contract is defined as $10 times index and is currently trading at 15379. John Q. anticipates that this hedge will reduce the portfolio beta to ___?
Business
1 answer:
Lubov Fominskaja [6]3 years ago
7 0

Answer:

Portfolio Beta  = 1.2815

Explanation:

given data

market value = $3,000,000

portfolio beta = 1.6

sells = 25

times index = $10

currently trading = 15379

to find out

anticipates that this hedge will reduce the portfolio beta to

solution

we get number of contract to sell is here

number of contract to sell = Portfolio Beta × \frac{Portfolio\ value}{index\ value\ * multiplier}      ......................1

put here value we get

25 = Portfolio Beta × \frac{3,000,000}{15379 * 10}

solve it we get

Portfolio Beta  = 1.2815

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Assume the following economic indicators: interest rates on loans are historically low, gasoline prices are low, unemployment ra
DIA [1.3K]

Answer:

Te answer is: The demand for new cars will rise, so the demand for auto loans will also rise, increasing the labor demand in companies that offer auto loans.

Explanation:

When the price of a good or service decreases, the quantity demanded for that good or service will increase.

Interest rates can be considered as the price of a loan, so when interest rates fall, the quantity demanded for loans will increase. This factor plus an increase in car sales, low gasoline prices and low unemployment are the perfect conditions for the auto loan industry to flourish.

When any industry is expected to do so well, their demand for labor is also expected to increase.

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3 years ago
The forces that affect foreign markets may differ dramatically from those affecting domestic markets. This makes a careful------
Ierofanga [76]

Answer:

c. environmental analysis

Explanation:

Environmental analysis is a strategic tool. It focuses on all external and internal elements that modifies the organization overall performance. It

It will focus on factors mostly out of control of the firm so the business analyze his trade enviroment to adapt to it.

In this enviroment analysis the company will check for:

  •    Political and legal factors in the country
  •    Socio-Economic factors
  •    Geography of the country

Each of these is a key point to determinate wether the organization will get the result or not.

3 0
3 years ago
The twenty pieces of data that nielsen used to determine a solution to its employee turnover issue are classified as:_________
Zinaida [17]

We can actually deduce that the twenty pieces of data that Nielsen used to determine a solution to its employee turnover issue are classified as: HR Metrics.

<h3>What is HR Metric?</h3>

Human Resource metric is known as the HR Metric. It is a measurement that is usually used to determine the effectiveness of the initiatives of the HR.

The areas were the HR initiatives will make use of HR Metric.

  • Training
  • Cost of labor
  • Turnover
  • Expenses, etc.

We see here that the twenty pieces of data that Nielsen used to determine a solution to its employee turnover issue are classified as HR Metrics.

Learn more about Human Resource Metrics on brainly.com/question/15586049

#SPJ1

6 0
2 years ago
Which of these is a renewable marine resource that could be utilized to produce electricity?
ikadub [295]

Answer:

Hydro energy

Explanation:

Hydro energy is a renewable marine resource that can be used to generate electricity.

It is derived from a dam that enables the formation of a controlled flow of water that will steer a turbine, thereby generating electricity.

Another renewable marine resource is Tidal energy that uses tidal currents to propel turbine generators in generating electricity.

5 0
3 years ago
Maxwell Communications paid a dividend of $1.35 last year. Over the next 12 months, the dividend is expected to grow at 11 perce
PilotLPTM [1.2K]

Answer:

Current dividend paid (Do) = $1.35

Growth rate (g) = 11% = 0.11

Cost of equity (ke) = 24% = 0.24

Po = Do<u>(1 + g)</u>    

           Ke - g

Po = $1.35<u>(1 + 0.11)</u>

                 0.24 - 0.11

Po = <u>$1.4985</u>

            0.13

Po = $11.53                                                                                                                                                                                                                

Explanation:

The current market price of the stock is a function of current dividend paid, subject to growth rate, divided by the current market price of the stock.

4 0
3 years ago
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