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3 years ago

Combining a protective put with a forward contract generates equivalent outcomes at expiration to those of a:

Business

1 answer:

Juliette [100K]3 years ago

7 0

Answer:

Fiduciary call.

Explanation:

Foreign exchange market can be defined as type of market in which the currency of one country is converted into that of another country.

For example, the conversion of dollars of the United States of America can be converted into naira (Nigeria) at the foreign exchange market.

A covered interest arbitrage can be defined as trading strategy in which an investor minimizes his or her currency risk by using a forward contract to hedge against the interest rate difference between two countries i.e the exchange rate risk. Thus, it's considered to be the most common interest rate arbitrage around the world.

Generally, when a protective put is combined with a forward contract it would generate equivalent outcomes at expiration to those of a fiduciary call.

This ultimately implies that, a fiduciary call combines both a call option and a bond that's risk free and matures on the expiry date of an option.

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How do Government price ceilings and price floors affect the economy? Select all that apply.

serg [7]

The following options are correct: A, B AND C.
Price ceiling and price floor are two price control methods which the government used to control price. Price ceiling is used to prevent prices from been too low while price floor is lowest price a commodity can be sold for .

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3 years ago

Jason and Mary are married taxpayers in 2019. They are both under age 65 and in good health. For 2019 they have a total of $41,0

Elis [28]

Answer:

a. Adjusted Gross income is calculated as;

= Wages + Interest - Deduction

= 41,000 + 700 - 5,000

= $36,700

b. The couple will pick their Standard deduction in 2019 because its more than the itemized deduction.

Standard deduction for couples in 2019 = $24,400

c. I assume you mean their 2019 taxable income which is;

= Adjusted Gross income - Standard deduction

= 36,700 - 24,400

= $12,300

<em>Note; As of 2018 there are no more personal deductions. </em>

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3 years ago

When your local Internet service provider increased its monthly charge from $40 to $50, the number of subscribers fell from 2,00

love history [14]

Answer: Inelastic

Explanation:

Based on the information given, we would calculate the elasticity of demand which would be:

= (Change in Quantity / Change in Price) (Initial Price/ Initial Quantity)

Change in Quantity = 1800 - 2000 = -200

Change in Price = 50 - 40 = 10

Initial Price = 40

Initial Quantity = 2000

Elasticity of demand would then be:

= (-200/10)(40/2000)

= (-20)(0.02)

= -0.4

Since elasticity of demand is less than 1, it is an inelastic demand.

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3 years ago

A business will construct its financial statements in a particular order because they are interrelated. This means that items fo

Blizzard [7]

Answer: d. Net income is part of the computation for ending retained earnings.

Explanation:

In the statement of owner's equity, Retained earnings are calculated and it is done with the Net Income. This is why when the net income is calculated from the Income Statement it is transfered to the SOE and used to calculate Retained Earnings.

Retained Earnings are calculated by the formula,

Ending Retained = Opening Retained Earnings + Net Income (losses) - Dividends

Net income is added to (or subtracted from if it is a Net loss) the Opening Retained earnings balance. Net dividends are also subtracted.

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3 years ago

Purchasing power parity (ppp) is considered an __________ measurement poverty levels

Nastasia [14]

Purchasing power parity (ppp) is considered an objective measurement poverty levels.

Purchasing power parity:

By removing the variations in price levels between nations, purchasing power parities (PPPs) are rates of currency translation that aim to equalize the purchasing power of various currencies.
monetary and developmental. Timothy Callen the rate at which the equivalent amount of goods and services might be purchased in one country using the currency of the other at a certain exchange rate.
By taking the geometric mean of the pricing relationships between each pair of economies for the two varieties of rice, the basic-heading PPP for each pair of economies may be calculated directly. This comparison is bilateral.
China, despite still being a developing country, is thought to have the greatest PPP in the entire world. This is due to the country's economy being the largest in the world, despite the fact that the bulk of its population earn extremely low wages.

Learn more about Purchasing power parity here

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2 years ago