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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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Function of financial system?​
Flura [38]

Answer:

A financial system functions as an intermediary and facilitates the flow of funds from the areas of surplus to the areas of deficit. It is a composition of various institutions, markets, regulations and laws, practices, money managers, analysts, transactions, and claims & liabilities.May 29, 2016

(can u flag me)

3 0
3 years ago
The Cutting Department at Blanc Company had beginning work in process inventory of 4,000 units, transferred out 9,000 units, and
Alecsey [184]

Answer:

The number of units started into production is 7,000.

Explanation:

Number of units started into production = Units transferred out + units of ending work in process - units of beginning work in process

                                                                   = 9,000 + 2,000 - 4,000

                                                                   = 7,000

7 0
3 years ago
Which financial component is a mandatory deduction from your gross pay? A. sales tax B. social security tax C. health insurance
mamaluj [8]

Employers are required to take a deduction for social security taxes.

3 0
3 years ago
Read 2 more answers
According to the theory of comparative advantage, consumers in all nations can consume more if there are
Oksanka [162]

Answer:

no restrictions on trade

Explanation:

Comparative advantage in economics is the ability of an individual or country to produce a specific good or service at a lower opportunity cost better than another individual or country.

The comparative advantage gives a country a stronger sales margin than their competitors as they are able to sell their specific products or render their peculiar services at a lower opportunity cost.

In 1817, David Ricardo who is an english political economist talked about the law of comparative advantage in his book “On the Principles of Political Economy and Taxation." where he asserted that countries can become better off by specializing in what they do or produce best and eliminate trade barriers (restrictions).

This simply means that, any country applying the principle of comparative advantage, would enjoy an increase in output and consequently, a boost in their Gross Domestic Products (GDP).

Hence, according to the theory of comparative advantage, consumers in all nations can consume more if there are no restrictions on trade.

8 0
3 years ago
During a recent​ month, Company planned to provide cleaning services to customers for per hour. Each job was expected to take ho
givi [52]

Answer: B.  $1,050  more than expected.

Explanation:

The company originally planned to have revenue resulting from 30 customers and charging $30 for an estimated 33 hours.

Estimated revenue was;

= 30 * 30 * 3

= $2,700

However, in actuality, they sold to 20 more customers than estimated but only spent 2.5 hours each.

Number of customers = 30 + 20

= 50 customers

Actual revenue

= 50 * 30 * 2.5

= $3,750

Difference is;

= 3,750 - 2,700

= $1,050 more

7 0
3 years ago
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