Answer:
A. The majority of the tax will be borne by the producer.
Explanation:
When an Indirect Tax (impact & incidence on different people) is levied : The burden of it is shifted to the party (buyers/ sellers) whose element (demand/ supply) is more inelastic (less responsive to price).
In this case: If demand for Carlo Rossi wine is relatively elastic (because of substitutes presence) - levying tax on it will hence imply major burden to be borne be producer (because demand is relatively elastic).
b,c : All tax will be borne passed to consumer / producer - if demand is perfectly inelastic/ if supply will be perfectly inelastic respectively.
d: Majority tax will be borne by consumer - if demand is relatively inelastic (than supply)
Answer:
The correct option is d.20N(0.2)-19.7N*(0.1)
Explanation:
Given the following inputs:
Stock Price 20
Strike Price 20
Time to maturity: 0.25
Risk-free Rate 0.06
Dividend Yield 0
Annualized volatility 0.2
Cost of Carry 0.06
We get the following outputs:
d1=0.2
d2=0.1
N(d1)=0.57925971
N(d2)=0.53982784
Call=0.94937723
Answer:
The answer is hedging.
Explanation:
Omega is engaging in hedging. Omega is locking the future spot price of the currency now. If this transaction happens over the counter, we call it forward contract. And if it happens at the exchange, we call it futures.
Hedging the foreign exchange risk is to reduce the risk of adverse depreciation of the currency in which Omega is expecting to receive.
Hedging is very important in risk management.
Answer:
decline in production differentiation and ,less competition
Explanation:
One would expect a gradual decline in product differentiation. This is because the few firms left in operation do not have to seek innovative ideas to capture the market, since they are few and the chances that a new rival will emerge are minute owing to the legal barrier. There is the development of an oligopolistic competition on product quality since the number of producers left is low and there Is the barrier of new entrants, both of which are key characteristics of an oligopolistic competition.
