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damaskus [11]
3 years ago
6

Options can also be used for hedging. Consider an investor who in May of a particular year owns 1,000 Microsoft shares. The shar

e price is $28 per share. The investor is concerned about a possible share price decline in the next two months and wants protection. The investor could buy 10 July put option contracts on Microsoft on the CBOE with a strike price of $27.50. This would give the investor the right to sell a total of 1,000 shares for a price of $27.50 each. If the quoted option price per share is $1, what is the total cost of the hedging
Business
1 answer:
Sunny_sXe [5.5K]3 years ago
8 0

Answer:

The total cost of hedging is $1,000

Explanation:

The Investor in may owns 1000 Microsoft shares which is currently selling for $28  per shares and he is on the opinion that the price will crash in next two months so need to be protected from the crash

So he should buy put option which gives him right to sell at strike price ($27.5) what ever the price may be . So for buying the right to sell, he need to pay premium the option writer

Given premium per share is 1, We have 1000 shares, so we need hedge for 1000 shares .

Cost of hedging = No of option contracts bought * Premium per option

Cost of hedging = 1000 * $1

Cost of hedging = $1000

Thus, the total cost of hedging is $1,000.

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When logging into Google Tag Manager for the first time, what needs to be set up?
lara31 [8.8K]

Answer:

The correct answer is B

Explanation:

GTM (google tag manager), is a tool which allows the person to manage as well as deploy the marketing tags on the website, without modifying the code.

It is used so as to make easier for the marketers in order to execute the tags without relying on the web developers to do it.

When logging to GTM, the first thing need to be set up or create is the tag manager account so as to proceed further.

8 0
3 years ago
Which has a higher flow rate? 10 customers arriving over two hours or 10 customers arriving over three hours?
Tcecarenko [31]

The one that gives a higher flow rate is: 10 customers over 2 hours. The flow rate is 5 customers per hour.

Flow rate is defined as the number of flow units that pass through the business process per unit time.

The flow unit can be money, customers, products, parts, services, etc.

Example of flow rate is number of customers serviced per hour, number of parts produced per minute, etc.

From the definition, the flow rate can be expressed as:

             Flow rate = number of flow unit / time interval

There are 2 scenarios in the given problem.

  • Scenario 1:

Flow unit = 10 customers

Time interval = 2 hours

Hence, the flow rate in scenario 1 = 10/2 = 5 customers per hour

  • Scenario 2:

Flow unit = 10 customers

Time interval = 3 hours

Hence, the flow rate in scenario 2 = 10/3 = 3.33 customers per hour

By comparing the above scenarios, the one that gives higher flow rate is scenario 1, 10 customers over 2 hours.

Read more about flow rate here:

brainly.com/question/14896563

#SPJ4

4 0
2 years ago
First​ Class, Inc., expects to sell 22,000 pool cues for $12.00 each. Direct materials costs are $4.00​, direct manufacturing la
MatroZZZ [7]

Answer:

budgeted costs for direct​ materials

  • $88,000

budgeted direct manufacturing​ labor

  • $132,000

budgeted manufacturing​ overhead

  • $18,480

Explanation:

Direct materials costs are $4.00 per pool cue.

Direct manufacturing labor is $6.00​ per pool cue.

Manufacturing overhead is $0.84 per pool cue.

total budgeted direct materials = 22,000 x $4 = $88,000

total budgeted direct labor = 22,000 x $6 = $132,000

total budgeted manufacturing overhead = 22,000 x $0.84 = $18,480

The information about the beginning and ending inventories is not relevant to this question since it only deals with budgeted or estimated costs which may or may not differ from actual costs.

3 0
3 years ago
When the Fed sells government securities in the open​ market, the money supply​ ________ because​ ________. A. ​increases; banks
Brums [2.3K]

Answer: Option (B) is correct.

Explanation:

Open market operations: In Open market operations, there is a buying and selling of government securities by the central bank of a nation. It is a monetary policy instrument that is used to control money supply in an economy.

If Fed sells the government securities in the open market then as a result there is a transfer of from public to Fed. So, there is a fall in the money supply because banks lose liquidity. Now, banks are able to make fewer loans to the borrowers and checking deposits also decreases.

5 0
3 years ago
Which of the following journal entries represents an increase in accounts payable correctly
PtichkaEL [24]

Answer:

C) Inventory xxx Accounts Payable xxx

Explanation:

Accounts payable is a liability, and a liability always has a credit balance, as the amount is due to them. The company needs to pay them back.

Accordingly the company buys inventory and the inventory is an asset and thus, the company will debit the inventory account.

Whenever any purchases are made, or any service is utilized on credit then the company creates an accounts payable as a liability as against it.

8 0
3 years ago
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