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kifflom [539]
2 years ago
4

A stock’s beta is a key input to hedging in the equity market. A bond’s duration is key in fixed- income hedging. How are they u

sed similarly? Are there any differences in the calculations necessary to formulate a hedge position in each market?
Business
1 answer:
umka21 [38]2 years ago
7 0

Answer:

Stocks and bonds are the two main classes of assets investors use in their portfolios. Stocks offer an ownership stake in a company, while bonds are akin to loans made to a company (a corporate bond) or other organization (like the U.S. Treasury). In general, stocks are considered riskier and more volatile than bonds.

Explanation: The difference between stocks and bonds is that stocks are shares in the ownership of a business, while bonds are a form of debt that the issuing entity promises to repay at some point in the future. A balance between the two types of funding must be achieved to ensure a proper capital structure for a business.

Important Formulas of Stocks and Shares

Investment/Cash required = Stock × Market Price/100. Income/Dividend = Stock × Rate/100. Stock purchased/sold = Income × 100/Rate% Investment/Cash required = Income ×Market Price/Rate% Income/Dividend = Investment × Rate/Market Price.

Formula for Bond:

F = the bond's par or face value. t = time. T = the number of periods until the bond's maturity date. This formula shows that the price of a bond is the present value of its promised cash flows. As an example, suppose that a bond has a face value of $1,000, a coupon rate of 4% and a maturity of four years.

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A company has the following three events in December: 1. December 1 - Pay last month's rent (November), $500. 2. December 15 - P
bearhunter [10]

Answer:

A transformation T: (x, y)  (x + 3, y + 1). For the ordered pair (4, 3), enter its preimage point.

(-1, 2)

(1, 2)

(7, 4)

Explanation:

A transformation T: (x, y)  (x + 3, y + 1). For the ordered pair (4, 3), enter its preimage point.

(-1, 2)

(1, 2)

(7, 4)

6 0
2 years ago
Jacob, an upper-level manager, recently saw a project fail because he did not establish objectives for all important organizatio
Neporo4naja [7]

Answer:

Jacob made a mistake at the Initiation stage of the project management process  

Explanation:

The initiation stage is the first stage in every project cycle. It is the stage of defining the objectives, scope, purpose and  deliverable to be produced.

If this stage of project management had been well managed the project might not have failed because the employees would have been guided on the trends to follow to achieve the  various goal and objectives set for each projects.

3 0
2 years ago
Vaughn Manufacturing has outstanding 596000 shares of $2 par common stock and 119000 shares of no-par 6% preferred stock with a
natima [27]

Answer: $107,900

Explanation:

Cumulative Preferred Shares refer to shares that a company has to pay dividends eventually. This means that if they are unable to pay for some years, they are to accrue that payment until they are able to.

There are 119000 shares of no-par 6% preferred stock with a stated value of $5.

That means preferred shares are liable to the following amount of dividends,

= 119,000 * 5 * 6%

= $35,700

Preferred Shares have not being paid for the past 2 years and need to be paid in the current year as well. That means 3 payments,

= 35,700 * 3

= $107,100

Preferred Shares are to be paid $107,100 out of the $215,000 with the rest going to common shares.

Amount going to Common Shares is,

= 215,000 - 107,100

= $107,900

Common Stockholders are to receive $107,900

7 0
2 years ago
Emilio works in a power plant control room. Dawn works in a coal mine. What do Emilio and Dawn have in common? They both are sel
Makovka662 [10]

Answer:

They both work in the Energy Transmission career pathway

Explanation:

Emilio and Dawn work in the "Energy Transmission career pathway".

In Energy career pathway, there are there stages. First is Energy generation, second is Energy transmission and third is Energy distribution.

In Energy transmission, power is evacuated from the generating stations via transmission networks. This happens in coal mines and power plant control room. Bulk of generated energy is covered in Energy Transmission Pathway from the source to the electrical substation through a transmission network. One needs critical thinking to analyze the information and stress management as employees to handle urgent tasks as well.

5 0
2 years ago
Kristian Thalen has just joined the corporate treasury group at Electrolux of Sweden, a multinational Swedish appliance maker. E
WITCHER [35]

Answer:

See explaination

Explanation:

cost of debt, after-tax = (4.3% + 1.2%)*(1 - 26%) = 4.07%

cost of equity = 4.3% + 1.3*4% = 9.5%

market capitalization = 286130000 * 182 = 52075660000

total value of equity outstanding = market capitalization = 52075660000

Debt portion = 11532000000 / (11532000000 + 52075660000) = 0.18

Equity portion = 1 - 0.18 = 0.82

weighted average cost of capital = 0.18*4.07% + 0.82*9.5% = 8.52%

7 0
2 years ago
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