Answer and Explanation:
Given that correlation between the monthly changes of the spot price and futures price of a commodity = 0.95
standard deviations of monthly changes of the spot price = 0.25
standard deviations of monthly changes of the futures price = 0.30
Futures contract =1000 units of commodity
To calculate how many futures contracts long or short if company needs to purchase 50,000 units of the commodity in 1 month using the futures contract hedge the price risk:
We calculate Hedge ratio = correlation * Spot price changes Standard deviation/ Futures contract price changes standard deviation
= 0.95 * 0.25/0.30
=0.7917
=79.17%
Calculate how many futures contracts the company should short =
50000 * 79.17%/1000
=39.58
= -39 contracts(negative shorts as from question)
Answer:
(a) systematic skill and problem solving skill
(b) problem-solving, team building skills and communication skills,
Explanation:
Yes I will definitely enjoy working in that kind of environment.
I will be able to learn, improve and build up my myself in such environment.
Getting equipped with all the necessary skills needed.
Answer:
both the equilibrium wage and the equilibrium quantity of labor will rise.
Explanation:
The equilibrium market wage rate is the cross section or intersection of the supply and demand variables for labour. Like the graph shows below, these two variables are correlated, meaning one rises so does the other. Therefore if output price rises it means that both the equilibrium wage and the equilibrium quantity of labor will rise.
Answer:
"Assuming the market of soda has a regular downward sloping" demand curve and upward sloping supply curve, the tax will <u>be added to</u> the price paid by buyers and <u>not the price received by</u> the price received by sellers.
Explanation:
When demand is takes a downward slope it simply means the good is not sort after in the open market.When Supply curve takes an upward curve it means their is a great availability of production resources.
Tax incidence goes alongside the above theory,in cases where demand is low ,the tax will will be imposed on the buyer .But in the case where demand is high the tax is usually imposed on the producer.