Answer and Explanation:
1. When there is high uncertainty in the market, there will be high yield spreads. This is because the higher the risk the higher the profit or compensation for risk
2.preferred stock positions pay more consistent dividends that common stock positions and also pay higher than bonds.
3.Accelerated depreciation is depreciation method in accounting that deducts higher depreciation expenses in the early life of an asset therefore leaving the company to pay less taxes on these assets and more cash flow. Increased cash flow consequently encourages and leads to more investment
The first step is<span> defining the problem and research objectives.</span>
Answer:
$2,666
Explanation:
Given that:
- Current ask price: $4.30
- Bid quotes $4.27
- Market buy order: 620 shares
So, the cost to buy these shares:
Number market buy order * Current ask price/share
= 620*$4.30
= $2,666
Hope it will find you well.
Answer:
0.9; 100 million; 90 million; 2,143
Explanation:
The new fuel's price change has a standard deviation that is 50% greater than price changes in gasoline futures prices.
So, if standard deviation of future prices is taken as '1' then for spot price it will be 50% higher, i.e 1.5
The hedge ratio:
= Correlation × (standard deviation of spot price ÷ Standard deviation of future prices)
= 0.6 × (1.5 ÷ 1)
= 0.9
The company has an exposure of 100 million gallons of the new fuel.
Gallons in future gasoline:
= Hedge ratio × 100 million gallons of the new fuel
= 0.9 × 100
= 90 million
Each contract is on 42,000 gallons, then
Number of gasoline futures contracts should be traded:
= 90,000,000 ÷ 42,000
= 2,142.9 or 2,143
