An investor who goes short in a futures contract will pay any increase in value of the underlying asset and will receive any decrease in value in the underlying asset
<h3>Who is an investor?</h3>
An investor is an individual who has invested certain amount of money in a business, firm or organization.
There is an agreement on the amount invested and how profit will be shared in the business.
Therefore, an investor who goes short in a futures contract will pay any increase in value of the underlying asset and will receive any decrease in value in the underlying asset.
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Answer:
1.15%.
Explanation:
This can be calculated as follows:
Yield be on a 10-year TIPS = Rate of return on the 10 year T-bond - Average Inflation - Market Risk Premium (MRP)
Therefore, we have:
Yield be on a 10-year TIPS = 4.05% - 2.0% - 0.9% = 1.15%
Therefore, the yield on a 10-year TIPS should be 1.15%.
Answer:
Portfolio A and Portfolio B
Explanation:
In this question, we apply the Capital Asset Pricing Model (CAPM) formula which is shown below
Expected rate of return = Risk-free rate of return + Beta × (Market rate of return - Risk-free rate of return)
The Market rate of return - Risk-free rate of return) = Market risk premium
Let us assume the market risk premium be X
For Portfolio A:
21% = 8% + 1.3 × X
13% = 1.3 × X
So, the X = 10%
For Portfolio B:
17% = 8% + 0.7 × X
9% = 0.7 × X
So, the X = 12.86%
Based on the market risk premium calculations, we can conclude that Portfolio A should be in short position while Portfolio B should be in long position as portfolio B has higher market risk premium than B
Answer:
The correct answer is letter "C": "If you do not report any differences with 15 days, it will be assumed that this statement is correct".
Explanation:
Accounts Receivable, or AR, is an accounting term used to refer to the money that is owed to a company by its customers. The customers, who may be individuals or corporations, are the debtors since they owe money for the goods or services provided by the company. When the product is sold in credit the company sets a number of days so that the customer can pay the bill amount. The term usually is 30, 60 or 90 days.
In that sense, and auditor may find 15 days suitable for a debtor for report changes in a statement, otherwise, it is considered as correct.