Answer: A. Early termination through an offsetting transaction with the original counterparty eliminates default risk.
Explanation:
A Forward contract is an agreement between two parties that obligates one party buying the asset that the seller will sell at a certain price and at a certain point in future.
If the contract is terminated early but there is an offsetting transaction which mirrors the contract obligation then that means that the obligation has been settled and so the default risk which is the risk that one party was not going to fulfil their obligation will be eliminated.
Additional information:
COSTS BENEFITS
1. Hire more workers 1. Set own hours of operation
2. Take on more operations costs 2. Have more space and control over . appearance.
3. Divide time between market 3. Serve more customers
and shop—or close stall at market
4. Accept more financial risk 4. Make and sell more food items
Answer:
Economic choices result in trade-offs.
Explanation:
Ezra realized that he cannot be at two places at the same time, so he has three options:
- divide his time between the market and the new shop
- close the market store
- hire employees that can work on the market store (*I'm collaborating with Ezra by proposing this third solution)
Ezra's dilemma represents a basic economic principle: resources are scarce and any decision made results in a trade off.
A better example, when you want something done, it can either be:
- a good high quality service that is finished very quickly, but it is also expensive.
- a good high quality service that is done at a low cost, but it takes a long time to be completed.
- an inexpensive service that is completed very quickly, but it is a low quality service.
Answer:
a. Items 1,5,9 and 10
Explanation:
M1 refers to Money Supply which includes physical currencies, coins, demand deposits, amounts in checking accounts, liquid cash and other forms of cash that can be withdrawn immediately eg in ATM.
<u>Items under M1 from the question are:</u>
3. Currency (coins and paper money) in circulation
6. Checkable deposits
M2 refers to money supply that comprises of the items in M1 and also include other types of deposits eg Savings deposits, mutual funds by individuals, time deposits. Funds that even though cannot be readily converted to cash but can be withdrawn with more effort.
<u>Items under M2 from the question are:</u>
2. Non-checkable savings deposits
4. Small-denominated (under $100,000) time deposits
7. Money market deposit accounts
8. Money market mutual fund balances held by individuals
Answer:
FV= $12,790,029.91
Explanation:
Giving the following information:
The Florida lottery agrees to pay the winner $250,000 at the end of each year for the next 20 years. What is the future value of this lottery if you plan to put each payment in an account earning 9 percent
We need to use the following formula:
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
FV= {250,000*[(1.09^20)-1]}/0.09= $12,790,029.91
Answer: Admin trade policy
Explanation: Administrative trade policies are governmental guidelines that are programmed almost always intentionally to limit the distribution of a particular import into a nation.Anti-dumping programs are designed to condemn dumping foreign firms. If a company is found to be dumping, government imposes countervailing duties.
In the given case, Govt. too imposes heavy scrutiny policy on imports that are supposed to demotivate the exporters from other countries. Hence from the above we can conclude that the given case depicts admin trade policy.
