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sveta [45]
3 years ago
7

The current spot price of WTI Houston Crude Oil Futures, expiring in 1-year, is $43 (per bbl). You can contract storage cost for

oil, for one year, at 2% (of the underlying spot price) on a continuously compounded basis. The risk-free rate is 0.5% per annum on a continuously compounded basis. If the current spot price for oil is $40.50, what is the implied convenience yield for this contract?
Business
1 answer:
jekas [21]3 years ago
7 0

Answer:

-3.49%

Explanation:

Theoretical price (Ft) = $43

Current spot price (St) = $40.5

Storage cost (u) = 2%

Risk free rate (Rf) = 0.5%

T = 1 year

Let y = Convenience yield

Ft = St e^(Rf + u - y)T

43 = 40.5 e^(0.005 + 0.02 - y)

y = - 3.49%

Hence, convenience yield = -3.49%

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The faculty member on my study abroad trip to Costa Rica has traveled there many times and is quite knowledgeable about the coun
Sedbober [7]

Answer:

B. Expert power

Explanation:

Based on the information provided regarding this scenario it can be said that the faculty member was using Expert Power. Expert Power is defined as the use of expert knowledge in order to get a subordinate to follow an instruction or order. Which in this specific scenario, the faculty members unique knowledge and experiences regarding Costa Rica allowed the other faculty members to look to him for guidance when dealing with topics revolving around Costa Rica.

8 0
3 years ago
At the beginning of the current year, Sandy Brewer had a zero basis in her 38 shares of stock in Lindlee, an S corporation, a ze
Alona [7]

Answer:

As in her worthless note,Sandy has a zero adjusted basis. Her bad debt deduction is Nil according to Section 166 (b).

Section 166(g)(1) states that her capital loss realized on the deemed sale of this stoke is also nil because of zero adjusted basis in her worthless stock.

According to Reg. Sec.1.1366-2(a)(5) if all of her stock is disposed by an S corporation shareholder and loss carryforward attributable to the Section 1366 (d) basis. Limitaitons are permanently disaalowed.

Hence, her $7,400 ordinary loss carryforward can never be deducted by Sandy.

Sandy has no 2012 tax consequences from worthlessness of her Lindlee investments

7 0
3 years ago
Read 2 more answers
A manufacturer is contemplating a switch from buying to producing a certain item. Setup cost would be the same as ordering cost.
Flauer [41]

Answer

D) compared to the EOQ, the maximum inventory would be approx 30% lower.

Explanation

EOQ = √(2*Co*D/Cc)

EPQ= √ (2*Co*D/(Cc*(1-x)))

x=D/P

D = demand rate

P =production rate

Co=ordering cost

Cc=holding cost

1) The production rate would be about double the usage rate.

hence, P = 2D

x=D/2D=0.5

EPQ= √ (2*Co*D/((1-0.5)*Cc))

EPQ= √ (2*Co*D/0.5Cc)

EPQ=√ (1/0.5)*EOQ

EPQ=√ (2)*EOQ

EPQ=1.41*EOQ

Hence, EPQ is around 40% larger than EOQ.

Ans.: c) EPQ will be approximately 40% larger than the EOQ.

2) Compared to the EOQ, the maximum inventory would be

maximum inventory = Q

EPQ = 1.41 EOQ

EPQ = 1.41*Q

Q=EPQ/1.41

Q=0.71 EPQ

Hence, compared to EOQ, maximum inventory in EPQ is only 70% of that in EOQ model.

4 0
3 years ago
Select the correct answer.
PolarNik [594]

Answer:

Elena wants to open a Chinese restaurant near a university. She has the required capital to start her restaurant. However, she is unable to find  

good chefs for her restaurant. Which type of resource is Elena lacking?  

Elena is lacking Labor resource.  

Explanation:  

The Labor resource is the term related with the people needed for running the operation of a business. In this case Elena has the need for the chefs that will help you with the elaboration of the dishes that she wants to offer.  

A business usually needs the following type of resources: labor, capital and land.  

As we said previously Labor is the resource related to people.  

Land is the resource related to the physical space where you want to set up your business. e.g store, online site, offices, building and so on.  

Capital is the resource related to the money or financial investment needed to cover the initial launching costs.  

7 0
3 years ago
In addition to biases existing on the part of people who do the ratings, the people who receive evaluations (i.e., the ratees) c
Anton [14]

Answer:

A

Explanation:

In addition to biases existing on the part of people who do the ratings, the people who receive evaluations (i.e., the ratees) can be biased as well. One example of ratee bias is EGOCENTRIC BIAS, which is best described as: The tendency to evaluate oneself more favorably than others do

Egocentric bias happens when you depend on your way of perceiving things more than it really is or how it looks in the eys of others. It is basically seeing things through your perspective.

6 0
3 years ago
Read 2 more answers
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