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liberstina [14]
3 years ago
7

How can knowledge of call options help a financial manager to better understand warrants and convertibles

Business
1 answer:
Arlecino [84]3 years ago
4 0

<u>Explanation:</u>

Note that<em> call options</em> are simply contracts or tradable assests that gives owners the right to buy the stock at a certain price. While <em>a financial manager</em> is someone task with managing the assets of an investor in a company.

Knowledge of call options will allow the financial manager to sucessfully work with stocks, warrants (recently issued shares of stock), and convertible securities (such as debts been replaced with common stocks).

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Assume MU_c and Mu_d represent the marginal utility that a consumer gets from products C and D, the respective prices of which a
lana [24]

Answer:

<h2>The correct answer in this case is option C. or MU(c)/P(c)>MU(d)/P(d).</h2>

Explanation:

Under consumer equilibrium theory for two commodity model,a rational consumer maximizes his or her utility when the marginal utility(MU) obtained from consuming one good is equal to the same of the other.This is the fundamental essence of the Law of Equimarginal Utility in Economics.Now,in this case,the consumer will purchase more of good C than good D if the Marginal utility obtained from one unit of good C or MU(c)  for the money spend on consumption of good C or price of C,P(c) is greater than the marginal utility obtained from consuming 1 more unit of good D or MU(d) for money spend on purchase of good D or price of that particular unit of D or P(d).Therefore,since the marginal satisfaction compared to the amount of money spend for the consumer is higher for good C compared to the other or good D,it will increase the total utility level of the consumer from that particular consumption bundle or pattern.Hence,he or she will spend more on the consumption of good C than good D.

8 0
3 years ago
A service is usually offered as part of a bundled package of services with a core service and one or more ____ services.suppleme
JulsSmile [24]

Answer:

A, supplementary

Explanation:

A supplementary service can be said to be an added service to an original service package.

That is, a supplementary service can be said to be an extra service or services that is embedded in a whole service.

For example, when you go to a tech store to have your hard drive replaced, a supplementary service such as general cleaning and routine check of your computer is included in the hard drive replacement service.

The main or core service is hard drive replacement while the supplementary service includes cleaning and routine check of other computer components.

Cheers.

4 0
3 years ago
The Hi-Stakes Company has a number of importing and exporting transactions. Importing activities result in payables and exportin
Lorico [155]

Answer:

The Hi-Stakes Company

a. If the direct exchange rate increases, the dollar strengthens relative to the other currency.

b. If the indirect exchange rate increases, the dollar also strengthens relative to the other currency.

Explanation:

When the exchange rate increases, it means that more of the other currency is required in order to embark on importing and exporting transactions.  However, the increases will weaken the ability of the importing currency to afford the dollar-based goods, which have then being made more expensive.

3 0
3 years ago
How can you employ one of the most powerful interactive business tools on the<br> Internet today?
topjm [15]

Answer:

<em>Online shopping one of the most powerful interactive business tools on the Internet today.</em>

Explanation:

Today on internet most powerful interactive business tools is online marketing and shopping. The products and goods and services are easily available on internet and just with the help of delivery person anything can be easily delivered to the doorstep.

There are many intermediaries attached to this business and hence making it super profitable. Therefore, b to c business is on a boom these days and the customers needs are satisfied just sitting at home.

8 0
3 years ago
Read 2 more answers
A U.S. firm holds an asset in Great Britain and faces the following scenario:
Lady_Fox [76]

Answer:

C) Sell £2,278.13 forward at the 1-year forward rate, F1($/£), that prevails at time zero.

Explanation:

given data

                     State 1           State 2               State 3

Probability      25%            50%                      25%

Spot rate      $ 2.50 /£    $ 2.00 /£            $ 1.60 /£

P*                   £ 1,800       £ 2,250             £ 2,812.50

P                     $4,500          $4,500               $4,500

solution

company holds portfolio in pound. so to get hedge, they will sell that of the same amount.

we get here average value of the portfolio that is

The average value of the portfolio = £ (0.25*1800 + 0.5*2250 + 0.25*2812.5)

The average value of the portfolio = 2278.13

so correct option is C) Sell £2,278.13 forward at the 1-year forward rate, F1($/£), that prevails at time zero.

3 0
3 years ago
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