index funds, mutual funds and exchange traded funds, bonds, and stocks. i think
Answer:
Elasticity of demand = 1
Explanation:
In the given scenario, if there are any changes in the income of Arista, the percentage of spending is always constant. We can say that income elasticity of demand is always equal to 1 .
Another change in the Arista scenario is that the percentage change in demand is always equal to the percentage change in income.
Answer:
15.4%
Explanation:
required initial investment $33,500
annual cash flows $7,400
useful life 15 years, no salvage value
depreciation expense per year = $33,500 / 15 = $2,233.33
simple rate of return = annual incremental net operating income / Initial investment
- annual incremental net operating income = $7,400 - $2,233.33 = $5,166.67
- initial investment = $33,500
simple rate of return = $5,166.67 / $33,500 = 15.4%
Answer:
The optimal hedge is 0.642 and it means that the size of the future positions should be 64.2% of the exposure of the company in a 3 month-hedge.
Explanation:
optimal hedge ratio
= coefficient of correlation*(standard deviation of quarterly changes in the prices of a commodity/standard deviation of quarterly changes in a futures price on the commodity)
= 0..8*(0.65/0.81)
= 0.642
Therefore, The optimal hedge is 0.642 and it means that the size of the future positions should be 64.2% of the exposure of the company in a 3 month-hedge.
Monitoring operations and keeping the company on track is part of the business operations. It provides the relevant information in order to make business decisions