1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
posledela
3 years ago
8

A company has a $36 million portfolio with a beta of 1.2. The futures price for a contract on the S&P index is 900. Futures

contracts on $250 times the index can be traded. What trade is necessary to achieve the following. (Indicate the number of contracts that should be traded and whether the position is long or short.)
a. Eliminate all systematic risk in the portfolio
b. Reduce the beta to 0.9
c. Increase beta to 1.8
Business
1 answer:
Blizzard [7]3 years ago
7 0

Answer:

Explanation:

A:

Number of contracts required:

= (0-1.2)×36,000,000÷(900×$250)

= -192

Since negative value, short 192 contracts.

B:

= (0.9 - 1.2)×36,000,000÷(900×$250)

= -48

Since negative value, short 48 contracts.

C:

= (1.8 - 1.2)×36,000,000÷(900×$250)

= 96

Since positive value, long 48 contracts.

You might be interested in
BBB Company has been a successful manufacturer of quality electronics products for the past 20 years. It is a publicly traded co
OverLord2011 [107]

Answer:

Answer 1.

Beneath referenced pointers show that organization arranged the liquidation for recent years or something like that.  

  • The way that there had been no interest in R&D for recent years which more likely than not brought about noteworthy cost putting something aside for the organization.  
  • BBB bought expanded size of stock on layaway from providers in recent years which is a warning.  
  • Indeed, even without bringing about any R&D cost for recent years, CFO of BBB moved toward the bank to expand the credit line of the organization and utilized all credit line without legitimate desk work.  
  • CFO erroneously guaranteed the brokers about new product offering so as to look for advances/increment credit line.  
  • Indeed, even with diminished deals, organization was indicating lower supply of stock. They more likely than not been offering the stock at cost to outsider or shrouded it at an undisclosed area to dupe the providers.  
  • With no interest in R&D and declining business possibilities, organization couldn't have given new offers for subsidizing  

Answer 2.

Yes, even if it is a fraudulent filing for bankruptcy, BBB organization despite everything can select to petition for financial protection or BBB can close the business through and through and escape with the reserve funds and continues from the offer of the stock. Indeed, even leasers and providers reserve the option to petition for automatic insolvency against the BBB in the event that BBB doesn't seek financial protection.  

It thoroughly relies upon the BBB Company, in the event that it selects to declare financial insolvency under section 7, or 11 of the liquidation code. Be that as it may, it is just under section 11 liquidation procedures of the chapter 11 court it very well may be set up that BBB's aim and untrustworthy strategic policies establishes to insolvency misrepresentation.

3 0
3 years ago
List three or four effects of financial irresponsibility.
Aleksandr-060686 [28]
Debt
Fraud
being broke
5 0
3 years ago
Organizations use ______ in conjunction with work breakdown structures to help management teams identify and eventually analyze
olga_2 [115]

Answer:

Risk Breakdown Structure

Explanation:

According to my research on the different techniques or structures used within organizations, I can say that based on the information provided within the question the term being used is called Risk Breakdown Structure. This structure is a pyramid structure which organizes different project risks and arranges them by category.

I hope this answered your question. If you have any more questions feel free to ask away at Brainly.

6 0
3 years ago
Breaking rules at a factory could mean all of the following, except
Margaret [11]
Breaking rules at a factory could mean all of the following except demotion.
3 0
3 years ago
Many times, margin, instead of retailing price, becomes the firm's decision variable. Suppose we notice Kroger is selling Dove a
adoni [48]
Dove is about ___38%
4 0
3 years ago
Other questions:
  • The fundamental purpose of the starting phase of a project is​ ________.
    13·1 answer
  • Alex is a production manager who believes his firm uses more of all types of resources than is necessary to produce its products
    5·1 answer
  • If you know that with 8 units of output, average fixed cost is $12.50 and average variable cost is $81.25, then total cost at th
    11·1 answer
  • The price of gas increased, which means_<br> people will buy gas in the future.<br> more<br> fewer
    13·2 answers
  • On December 1, Victoria Company signed a 90-day. 8% note payable, with a face value of $16, 200. What amount of interest expense
    6·1 answer
  • Homer notices that he gains more weight if he eats more doughnuts. Fill in the blanks to com the passage about the correlation b
    9·1 answer
  • A travel company sells tours in Costa Rica on its website. Instead of designing the website themselves, the company hired an out
    5·1 answer
  • Identify three major groups of people involved in the marketing research process, and then give at least one example of an uneth
    12·1 answer
  • The production department in a process manufacturing system completed 80,000 units of product and transferred them to finished g
    12·1 answer
  • Verify describe the distillation process of alcohol​
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!