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pantera1 [17]
2 years ago
6

Suppose that the standard deviation of quarterly changes in the prices of a commodity is $0.65, the standard deviation of quarte

rly changes in a futures price on the commodity is $0.81, and the coefficient of correlation between the two changes is 0.8. What is the optimal hedge ratio for a three-month contract? What does it mean?
Business
1 answer:
Natasha_Volkova [10]2 years ago
6 0

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.

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In considering the arguments for the relevance of dividends, which of the following statements is/are correct? a. Shareholders w
stealth61 [152]

Answer:

The correct answer is letter "A": Shareholders who are risk averse may prefer some dividends over the promise of future capital gains.

Explanation:

A dividend is a cash distribution by a company to its shareholders out of the profits of a period. Capital Gain refers to the increase in the value of a capital asset or an investment upon sale. From the two of them, dividends are safer investments since they do not rely exclusively on the sales of an asset.  

Thus, a conservative investor is likely to choose dividends over the promise of capital gains.

5 0
2 years ago
Mark is the manager of Mayhem Enterprises. Mark believes Angel, a twenty-year employee of Mayhem, is stealing from the business.
GenaCL600 [577]

Answer:

The torts Mark might have committed by his action includes:

  • assault and battery
  • intentional infliction of emotional distress
  • defamation of character

Explanation:

Assault and battery : grabbing of the 25 year old employ by the hand is considered forceful and wrong handling of a person and therefore is considering assault

Intentional infliction of emotional distress: keeping her in his office without actually seeking for her consent and also with her not aware of his next line of action can cause her emotional distress

defamation of character : screaming at her in front of other employees without evidence of stealing is considered defamation of the employees character

6 0
2 years ago
Read 2 more answers
2. What type of market is Huy Fong targeting with its sriracha sauce?
Luda [366]

Answers with Explanations:

1. What type of market is Huy Fong targeting with its Sriracha sauce?

"Huy Fong's Food Inc." is a company that sells <em>Sriracha sauce</em> made in California. It has also partnered with several companies in order to provide variety of products based on its official flavor.

Since Huy Fong is <u>open to competition with other rivals</u>, it is clear that the company is using the "monopolistic competition" <u>type of market.</u> Hung Fung is not the only company that sells sriracha sauce, other companies like <em>Heinz</em> and <em>Tabasco</em> are also selling the same sauce.

However, it has been branded as the most authentic and original of all. Such <u>uniqueness of the Huy Fung Sriracha sauce</u> makes it<em> stand out from the rest</em>. In this aspect, the company is <em>monopolizing the competition.</em>

2. Of the four categories of segmentation variables, which is most important to Huy Fong's segmentation strategy, and why?

Of the four categories of segmentation variables, "demographic" is the most important to Huy Fung's segmentation strategy. The company's target market are men and women who belong to the<u> age range of 20-30 in the United States.</u>

This is the<em> specific population</em> that the company is focusing on. These people are considered to be<em> budgeting their money</em> and in that sense, they'd be able to afford the sriracha sauce.

4 0
2 years ago
Great Adventures Problem
andrew11 [14]

Answer and Explanation:

The Journal entry is shown below:-

Amount should be capitalized for new vehicle = Cost + Painting and new logo cost + Deluxe Roof rack and trailer hitch

= $15,600 + $6,600 + $2,900

= $25,100

We took the cost of painting and deluxe roof and trailer hitch costs into account as they are supposed to increase the vehicle's future benefits.

Depreciation = (Cost - Salvage Value) ÷ Number of Years

= ($25,100 - $6,300) ÷ 5

= $3,760 per year

In the year 2022 vehicle is used only for 6 months (July to Dec), depreciation expense for the year ended December 31, 2022 is

= $3,760 × 6 ÷ 12

= $1,880

So, the Journal entry is

Depreciation expense Dr, $1,880

         To Accumulated Depreciation $1,880

(Being depreciation provided for the year 2022 is recorded)

Therefore for recording the depreciation provided for the year 2022 we simply debited the depreciation expenses while we credited the accumulated depreciation.

3 0
2 years ago
We learn in reading 3 that the best way to control silos in an organization is to make sure the span of control is narrower than
Anton [14]

Answer:

THE ANSWER IS TRUE

Explanation

What is Span control?

Span control can be referred to as the number of subordinates under the managers direct control, and as an example,a manager with six direct reports has a span of control of six.

The commonly accepted definition of span of control is as follows: “the number of subordinates directly reporting to a leader/manager.

4 0
2 years ago
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