Answer:
The correct answer is letter "B": Both statements are correct.
Explanation:
A futures contract is a type of forward contract between a buyer and a seller of an asset. They agree to exchange goods and money at a future date but at a price and quantity determined today. Futures contracts are standardized, regulated, and free of counterparty risk. In difference to other forward contracts, futures contracts are traded in secondary markets such as the Chicago Mercantile Exchange and the Intercontinental Exchange.
A forward contract is an agreement to buy and sell an asset at a future date. The price of the asset is fixed at the time the contract is executed. They are similar to a futures contract but forward contracts do not trade in an exchange.
<u>Calculation of Return on Equity:</u>
Return on Equity can be calculated using the following formula:
Return on Equity = Net Income / Equity
We can calculate net income using the following formula:
Net Income = Sales * Profit Margin = 3650*5% = $182.50
And we can calculate Equity using the following formula:
Equity = Total Assets * (1-Total Debt ratio) = 3350*(1-41%) = $1976.50
Now Finally,
Return on Equity = Net Income / Equity = 182.50 / 1976.50 = 9.23%
Hence the return on equity is <u>9.23%</u>
Answer with Explanation:
Following are some types of account investments that are better for emergency funds and the return on these investment varies depending upon the risk born by the investors:
- Current Account Investments
- Commodity Investments
- Mutual Funds
If the inflation rate is below the return paid on the current account then it could be a better investment option as the money doesn't loose its value over time.
If the inflation rate is higher than the return paid on the current account then it is better to invest in commodities like gold, petroleum products, etc, that are often termed as speculative investments.
If the investor is risk seeking person, then it is better to invest in mutual funds as the return on such investments is higher because of the higher risk that the investor bears.
Answer:
$125,000
Explanation:
Given the following resorted data from the question:
Spot Rate Forward Rate for
March 16, 2020 Delivery
November 16, 2019 $1.250 $ 1.248
December 31, 2019 1.260 1.255
March 16, 2020 1.265 1.265
The applicable rate to use to calculate the amount the company will report sales revenue on its 2019 income statement is the spot rate ruling on the date the company made the sale to the customer in Germany, i.e. $1.250 on November 16, 2019.
Therefore, we have:
Sales revenue = €100,000 * $1.250 = $125,000.
Therefore, the amount the company will report sales revenue on its 2019 income statement is $125,000.
