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Brrunno [24]
2 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]2 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:

The answer options are:

a. Attribution Share Alike

b. Attribution No Derivatives

c. Attribution Non-Commercial

d. Attribution Non-Commercial Share Alike

The correct answer is: d. Attribution Non-Commercial Share Alike.

Explanation:

Attribution - Non-Commercial - Share Alike (by-nc-sa): Commercial use of the original work or possible derivative works is not allowed, the distribution of which must be done with a license equal to the one that regulates the work original. This license is not a free license.

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3 years ago
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Explain why the marginal rate of technical substitution is likely to diminish as more and more labor is substituted for capital.
Likurg_2 [28]

Answer: This is because the marginal rate of technical substitution is the ratio of the marginal product of labour to that of capital and for the output to be constant opportunity cost comes in, one input has to be reduced to increase the other input.

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The marginal rate of technical substitution (MRTS) shows the amount by which the quantity of an input can be lowered when an extra unit of another input is​ utilized on order for the output to remain constant.

The marginal rate of technical substitution is likely to reduce as more capital is substituted for labor because the marginal rate of technical substitution is the ratio of the marginal product of labour to that of capital and for the output to be constant opportunity cost comes in, one input has to be reduced to increase the other input.

8 0
3 years ago
A company reported beginning inventory of 100 units at a per unit cost of $25. It had the following purchase and sales transacti
patriot [66]

Answer:

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Cr Sales

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Cr Inventory 625

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Cr Trade Payable 375

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Dr Trade Receivable $2,500

Cr Sales $2,500

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Cr Inventory $1,375

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Explanation:

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14-Jan

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Cr Sales (50*50) $2,500

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Cr Inventory $1,375

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8 0
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What is Nick causing? Nick has set up his steel factory near a community lake. The waste from his factory is directly thrown in
gregori [183]
<span>Nick is causing pollution specifically water pollution. Since he is contaminating the community lake. This kind of environmental deprivation happens when pollutants are straight or meanderingly discharged into water forms lacking passable treatment to eliminate harmful composites. This can damage the animals existing by the lake, and the people breathing the air.</span>
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