Checks written in November $9,750
Less: Checks paid by bank in November $8,800
Checks outstanding at the end of November $950
Add: Checks written in December $11,762
Less: Checks paid by bank in December 10,889
Checks outstanding at the end of December $1,823
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- a random freshman
Answer:
C) Sell £2,278.13 forward at the 1-year forward rate, F1($/£), that prevails at time zero.
Explanation:
given data
State 1 State 2 State 3
Probability 25% 50% 25%
Spot rate $ 2.50 /£ $ 2.00 /£ $ 1.60 /£
P* £ 1,800 £ 2,250 £ 2,812.50
P $4,500 $4,500 $4,500
solution
company holds portfolio in pound. so to get hedge, they will sell that of the same amount.
we get here average value of the portfolio that is
The average value of the portfolio = £ (0.25*1800 + 0.5*2250 + 0.25*2812.5)
The average value of the portfolio = 2278.13
so correct option is C) Sell £2,278.13 forward at the 1-year forward rate, F1($/£), that prevails at time zero.
Choosing when to start a project is related to the investment timing decision.
<h3>Is an investment's timing crucial?</h3>
The following are some advantages of market timing strategy:
- Market timing is utilized to increase earnings and counteract the dangers involved with small gains.
- When it comes to investments, the basic risk-return trade off holds true: the greater the risk, the greater the gain.
<h3>What does the term "investment decision" mean?</h3>
The choice and acquisition of the long-term and short-term assets in which funds will be invested by the organization are referred to as investment decisions.
<h3>What is a timing option for investments?</h3>
The investment-timing option, which is the choice to delay rather than immediately adopt or reject a capital budgeting project, can dramatically boost a project's value when interest rates are unpredictable.
<h3>What is an example of an investment decision?</h3>
- Decisions on investments can be made for the long- or short-term.
- A capital budgeting decision is another name for a long-term investment choice. Long-term financial commitments are necessary.
- A new machine purchase to replace an older one, the purchase of a new fixed asset, the establishment of a new branch, etc. are a few examples.
learn more about investment decision here
<u>brainly.com/question/24246300</u>
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