Answer: D. I, II, and III
Explanation:
If expecting a price deduction, you can buy Put options. These give you the right to sell an underlying stock at a certain price regardless of what the price in the market is. If you purchased this, you can sell your stock above market value if it does go down.
You can sell write call options for a fee where you give the buyer the right to buy your shares at a certain price in future. This is only valuable if prices rise so as you are expecting prices to fall, you could make a premium on the call option contract fees if prices fall without having to sell off your shares.
Hedging with puts is better than short calls if you are expecting a major stock price decline as the opportunity for profit is higher.
Answer: A. at the time of contracting.
Explanation:
Insurable interest is the reasonable concern to obtain insurance against unforeseen events such like losses or death. Insurable interest is when the loss of an object or damage would result in a financial loss.
Based on the information given, Maddox Auto Parts gained an insurable interest in the mufflers at the time of contracting. An individual will gain an insurable interest immediately s contract takes place.
Therefore, the correct option is A.
Answer:
$115,000
Explanation:
Data provided as per the question is below:-
Beginning balance = $81,000
Direct material issued = $27,000
Direct labor incurred = $7,000
The computation balance Process Inventory is shown below:-
Balance in the Work-in-Process Inventory = Beginning balance + Direct material issued + Direct labor incurred
= $81,000 + $27,000 + $7,000
= $115,000
Answer:
True
Explanation:
The net cash flow for the year can be calculated using the following equation:
net cash flow = net income + accounts payable - accounts receivable
net cash flow = $29,500 + $5,400 - $2,500 = $32,400
We have to subtract accounts payable since they were included in the net income but the cash has not been received yet.
Answer:
D. agents will immediately adjust their expectations of inflation up.
Explanation:
Expansionary monetary policies are geared towards stimulating economic growth. The Fed can impose lower interest rates or purchase bonds and securities in open market operations as expansionary tools. Lowering interest rates encourages banks and other lending institutions to lend money to firms and households.
Purchasing bonds and securities adds money to the banking system. The increased money will be loaned out to businesses and individuals. The availability of low-cost credit motivates firms to borrow and expands their business capacities. When households borrow with ease, it leads to an increase in consumption expenditure. These actions result in too much money in circulation, which is inflation.
