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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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Seth appears to be taken aback by the number of files on his desk and his coworker’s comments about his boss. This reaction depi
ycow [4]

Answer:

ENCOUNTER

Explanation:

Seth appears to be taken aback by the number of files on his desk and his coworker’s comments about his boss. This reaction depicts the Encounter stage of the socialization process.

4 0
3 years ago
Micron owns 35% of Martok. Martok pays a total of $47,000 in cash dividends for the period. Micron's entry to record the dividen
creativ13 [48]

Answer:

1. Option (A) is correct.

2. Option (C) is correct.

Explanation:

1. Micron's entry to record the dividend transaction is as follows:

Cash A/c      Dr. $16,450

To Long - Term Investments  $16,450

(In this case, since the holding interest is more than 20%, Equity method is used)

workings:

Dividend = $47,000 × 35%

               = $16,450

2. The entry to record the receipt of dividend would be:

Cash A/c     Dr. $12,000

To Dividend Revenue A/c   $12,000

(To record the receipt of dividend)

Workings:

Dividend = 3,000 shares × $4 per share

               = $12,000

4 0
3 years ago
Cameroon Corp. manufactures and sells electric staplers for $16.10 each. If 10,000 units were sold in December, and management f
Andrej [43]

Answer:

$165,975

Explanation:

The computation of sales budgeted is shown below:-

For computing the  Sales budgeted for February first we need to compute the January and February units.

January = 10,000 + (3% × 10,000)

= 10,000 + 300

= 10,300

February = 10,000 + (3% × 10,300)

= 10,000 + 309

= 10,309

Sales budgeted for February = For February × Each electric staplers

= 10,309 × $16.10

= $165,975

So, for computing the Sales budgeted for February we simply applied the above formula. The option is not available.

3 0
4 years ago
Tom knows that the title insurance company made a mistake on his property title. Because of their mistake, his neighbor now has
gayaneshka [121]

Answer:

The correct answer is d. risk aversion.

Explanation:

Risk aversion is an investor's preference for avoiding uncertainty in their financial investments.

Due to this attitude towards risk, this type of individuals directs their investment portfolio to safer financial assets even though they are less profitable.

The phenomenon of risk aversion implies by definition a certain level of risk rejection by a person who invests in financial markets. A person may face a risk aversion situation, be risk neutral or be risk prone.

7 0
4 years ago
While working on a printer, you spill a cleaning solution that was sitting on the floor next to the printer stand. What step sho
aleksandrvk [35]

Answer: Check the MSDS for the liquid and follow the instructions.

Explanation:

The Material safety data sheet(MSDS) are document that contains information on the potential hazards(health, fire, reactivity & environmental) and working safely with chemical products. What to do after the spill is to check the MSDS for the liquid and follow the instructions.

8 0
3 years ago
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