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Vlad1618 [11]
3 years ago
13

31. A portfolio manager in charge of a portfolio worth $10 million is concerned that stock prices might decline rapidly during t

he next six months and would like to use options on an index to provide protection against the portfolio falling below $9.5 million. The index is currently standing at 500 and each contract is on 100 times the index. What position is required if the portfolio has a beta of 1
Business
1 answer:
Angelina_Jolie [31]3 years ago
6 0

Answer:

200

Explanation:

Base on the scenario been described in the question, the position required if the portfolio has a beta 1 is been calculated as follows .

number of contracts required is

Number of contract =10,000,000/(500×100)

Number of contract =10,000,000/50,000

Number of contract =200.

A long put position is needed because the contracts must provide a positive payoff when the market reduces.

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When managers and employees within the same department are brought together in cross-functional teams to solve particular proble
katen-ka-za [31]
Yes. This is a team-based design since managers and employees are being grouped into teams in order to solve certain problems. They help hand in hand in coming up to a solution. Hope this answers the question. Have a nice day.
3 0
4 years ago
Warren Industries uses a process-costing system for its single product, which is manufactured from Material X and Material Y. X
nordsb [41]

Answer:

C. 91,000 74,000

Explanation:

Calculation to determine the choices that correctly expresses the total equivalent units of production for Material X and Material Y

Calculation for Material X using this formula

Material X = Started and completed + Ending Work-in-process inventory

Let plug in the formula

Material X = 74,000 units + 17,000 units

Material X = 91,000 units

Therefore Material X will be 91,000 units

Calculation for Material Y

Based on the information given Material Y will be 74,000 units reason been that Y is added at the 80% point while the current point on the other hand is 30%.

Therefore Material Y will be 74,000 units.

8 0
3 years ago
Sandhill Company deducts insurance expense of $234000 for tax purposes in 2021, but the expense is not yet recognized for accoun
LenaWriter [7]

Answer:

$242,800

Explanation:

                                        Tax Base      Accounting Base   Temporary Difference

2021 Insurance Expense $234,000          0                       $234,000

This insurance expense will result in taxable temporary difference=$234,000*20%=$46,800

The journal entry will be;

Income Tax Expense        Dr.$46,800

Deferred Tax liability        Cr.$46,800

Therefore Income tax expense will be=$196,000+$46,800=$242,800

8 0
3 years ago
Johna's Plant Nursery Company pays the salaries of its two employees. How will this transaction affect the accounting equation?
Dvinal [7]

Answer:

Equity will be decreased.

Salaries expense will be increased.

Explanation:

As paid salaries are an expense, the total amount of <em>salaries expense</em> will certainly increase (no matter if it is paid or not). Since salaries expense is not a balance sheet item, it has to be represented through an item in it. Equity  will be decreased through the decrease of retained earnings (equity item), which is the result of increased expenses.

8 0
3 years ago
Excellent Manufacturers Inc. has a current production level of​ 20,000 units per month. Unit costs at this level​ are: Direct ma
Marina CMI [18]

Answer:

The increase in operating profit is $1,829.00.

Explanation:

The rise or fall in the operating income:

= Purchase unit × ( offer price- direct material- direct labor- variable overhead)

The rise or fall in the operating income: = 1550× (2 - 0.26 - 0.4 - 0.16)

The rise or fall in the operating income: = $1829

Therefore the profit will increase by $1829

Here all the fixed cost is not considered because it is a sunk cost and variable and administrative expenses are also not considered because these costs are not going to be incurred for offer.

6 0
3 years ago
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