Answer:
Steve Jobs coming back, Innovations, and Tim Cook taking over as COO
Explanation:
The fluctuations in stock prices of a company are due to improved performance of the company in meeting it's objectives and perception that the business will do better in the future.
In the given scenario there was an initial increase in Apple’s stock price from $27.97 to $702.10, an increase of 25 times.
This can be attributed to the return of Steve Jobs as the CEO of Apple. There was a confidence boost by his coming back. Also there were various innovations like: iPhone, iMac, iPod, and iTunes. These improved the performance and by extension share price of Apple.
However when Tim Cook took over as COO he reduced production by half resulting in stock price decrease by 37% from its peak in September 2012 until the end of March 2013, from $702.10 to $442.66.
Answer: $1,227
Explanation:
The value of the futures contract should be calculated by the formula;
= Stock Index Value * ( 1 + risk free rate ) - dividends
= 1,200 * ( 1 + 0.06) - 45
= $1,227
Answer:
Secondary market; Prospectus
Explanation:
The broker is talking about the secondary market. After initial public offering, shares are traded again privately, in the secondary market. Likewise, the broker wants to send a brochure or a prospectus to the client in order to help him understand about the company to finalize the decision. A prospectus consists of the company’s complete information.
Answer:
Compensate for the risk
Explanation:
In the context of the scenario given , risk is defined as a form of exposure to a potential dangerous situation.
It is necessary for any person organization facing a risky situation to look for ways of minimizing or avoiding the risk in order to reduce related losses. Risks can be avoided through transfer , rejection , delayed action and compensating the risk,
The method of risk aversion described in the scenario is to compensate the risk.
Compensating the risk is a risk control method of using an alternative means to achieve a particular purpose in order to avoid the related risks to using the initial method.
Answer:
1. c.$124,000
2. e.$46,000
Explanation:
The Fuller company has issued two bonds with separate coupons. The liability for unredeemed bond at December 31, 2012 is $124,000.
The value of bond when issued is $720,000
Value of bond at expiration date is $300,000
720,000 / 300,000 = 2.4
2.4 * 190,000 = 456,000 / 3.67 years
= $124,000
Case corporation has issued bond with value 94 issued at par with 10% coupon rate.
Using the amortization bond table we get $46,000.
$(100000 / 94 ) * 10% = 106.38 * 5 years
= 5,319.20 * 8.64 amortizing rate
= $46,000
