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Brrunno [24]
3 years ago
5

The manager of a $600,000 aggressive stock portfolio wishes to hedge with OEX 600 Put contracts. The portfolio has a beta of 2.

To hedge, the manager will buy:_______
Business
1 answer:
Anvisha [2.4K]3 years ago
3 0

Answer: 20 contracts

Explanation:

It should be noted that each OEX 600 Put contract will cover:

= 100 × 600

= $60,000 of stock

Therefore, to hedge $600,000 portfolio, ($600,000/$60,000) = 10 contracts will be needed.

Since the portfolio has a beta of 2, this means that:

=2 x 10 contracts

= 20 contracts will be needed.

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Answer: High up-front costs.

Explanation:

Webster's limitation to owning a chain of incorporated bakeries would be the high up-front cost or capital needed to start up the company.

The up-front costs as in the case of the question is the money needed to start up the bakery company.

3 0
3 years ago
How do the effects of voluntary restraint agreements differ from the effects of a tariff? Tariffs reduce trade by more than volu
Snezhnost [94]

Answer:

Tariffs increase the prices of imports, helping domestic producers, while voluntary restraints do not.

Explanation:

A tarrif is defined as a tax that is imposed by government on goods and services that are imported from another country. Tarrifs are used to discourage imports by increasing their prices compared to locally produced goods and services.

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3 years ago
What are the different systems of management in buisnesas.
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Explanation:

7 0
2 years ago
WILL GIVE BRAINLIEST!!
anyanavicka [17]

Answer:

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3 years ago
You wish to earn a return of 13% on each of two stocks, X and Y. Stock X is expected to pay a dividend of $3 in the upcoming yea
Otrada [13]

Answer: D. will be less than the intrinsic value of stock Y

Explanation:

Based on the information given above, the intrinsic value of Stock X will be calculated thus:

D1 = Dividend in next year = $3

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r = = 13%

Therefore, intrinsic value of Stock X will be:

= D1 / (r-g)

= 3 / (13% - 7%)

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Therefore, the intrinsic value of stock X is $50.

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r = 13%

Intrinsic value of Stock Y will be:

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