Homework Answers
1 st question.
C.The owner has the obligation to buy an asset at a specific price.
In a futures contract the buyer has the obligation to but the asset at a specific price, seller has to sell it at that price.
In an option contraction the buyer has the right but not the obligation to sell the asset.
2nd question.
B.The one with the highest price per share.
DJIA, assigns weights based on stock price per share and does not consider the number of shares outstanding or market capitalisation.
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Which of the following desc The owner (buyer has the right asset) at a specific price....
of the following describes a futures contract? ser) has the right (but not the obligation) to...
of the following describes a futures contract? ser) has the right (but not the obligation) to buy a stock 10. Which of the following des A) The owner (buyer) has ther or asset) at a specific price. B) The owner has the right but specific price. C) The owner has the obligation to buy er has the right (but not the obligation) to sell an asset at a has the obligation to buy an asset at a specific price. D)...
pls answer all Which stock should have the higher price? ALL ELSE EQUAL Stock A has...
pls answer all
Which stock should have the higher price? ALL ELSE EQUAL Stock A has a required return of 11% Stock Bhas a required return of 10% 5. Stock A has a dividend of $2. 6. Stock A has a dividend growth rate of 696 Stock B has a dividend of 54 Stock B has a dividend growth rate of 4% 7. Stock A has an expected price of $40 Stock Bhas an expected price of $30 Which stock...
QUESTION 1 Michael opened a margin account with a discount, online broker. Two months ago he...
QUESTION 1 Michael opened a margin account with a discount, online broker. Two months ago he sold short 100 shares of stock; the market price of the stock at that time was $63.50. Today it is priced at $47.30. If he decides to “buy to close” (i.e., buy 100 shares of stock in order to close his open “short position”) what will be his net gain or loss? (For purposes of this problem assume each trade costs $25.) $1,620 gain...
Question31 Which of the following is a disadvantage of using standardized financial contracts as a risk...
Question31 Which of the following is a disadvantage of using standardized financial contracts as a risk management tool? they are typically cheaper to enter into, since they are standardized they are typically more expensive than customized contracts they are typically more liquid, and thus provide the potential to sell out of the position. their specifications may not provide a good match to the actual risk exposure being hedged. none of the above, i.e. all of the above are either advantages...
1. Which of the following trades implies that ownership has been taken? a. Buying a futures...
1. Which of the following trades implies that ownership has been taken? a. Buying a futures contract. b. Selling a futures contract. c. Buying a stock. d. Shorting a stock. e. None of the above implies ownership. The following transactions are the only ones made during the first 4 days a futures contract trades. Answer question 2 based on this table. DAY TRANSACTION S O 1 A Long 30, B Short 30 2 A Long 55, C Short 55 3...
Read below and answer, Why does a business that has profit of $30,000 per year need...
Read below and answer, Why does a business that has profit of
$30,000 per year need a bank loan?
Jones Electrical Distribution After several years of rapid growth, in the spring of 2007 Jones Electrical Distribution anticipated a further substantial increase in sales. Despite good profits, the company had experienced a shortage of cash and had found it necessary to increase its borrowing from Metropolitan Bank-a local one- branch bank-to $250,000 in 2006. The maximum loan that Metropolitan would make...
Please read the facts of the case and prepare answers for the following questions : 1...
Please read the facts of the case and prepare answers for the
following questions :
1 – What is the relevance of the $2,000 monthly payment
to Dave Verden on the analysis of Jones’ financing needs?
2 – What metrics could you use to compare the historical financial
results for Jones with the projected financial results under the
four defined scenarios?
3 – Other than financing needs, what other issues should Jones
address as he considers the different growth
scenarios?...
8. Which of the following accounts has a normal debit balance? a. Accounts Payable b. Sales...
8. Which of the following accounts has a normal debit balance? a. Accounts Payable b. Sales Returns and Allowances c. Sales d. Interest Revenue 9. Using a perpetual inventory system, the entry to record the purchase of $30,000 of merchandise on account would include a a. debit to Sales b. debit to Merchandise Inventory c. credit to Merchandise Inventory d. credit to Sales 10. A retailer purchases merchandise with a catalog list price of $15,000. The retailer receives a 30%...
Jennifer is interested in the mutual fund RBC U.S. Index Fund – Series A. She has...
Jennifer is interested in the mutual fund RBC U.S.
Index Fund – Series A. She has a few questions for
you before she buys this investment.
a) Does the reported fund’s return include the Management
Expense Ratio (MER) ? Yes or No
b) What type of fee is charged: No-load, Front-end load or a
Back-end load?
c) Is the status of this mutual fund classified as a closed-end
or open-end mutual fund?
d) Based on your response in c), explain...
Q1 Which of the following are included and which are excluded in calculating this year's GDP....
Q1 Which of the following are included and which are excluded in calculating this year's GDP. Explain in each instance. a. A monthly scholarship cheque received by an economics student b. The purchase of an almost new tractor by farmer Kojo C. The cashing in of a savings bond d. An increase in business inventories e. Tim Horton's purchases a corner grocery store f. Fearless Qweenie Kong, a stuntwoman, purchases a life insurance policy for a billion dollars ($) g....
of the following describes a futures contract? ser) has the right (but not the obligation) to buy a stock 10. Which of the following des A) The owner (buyer) has ther or asset) at a specific price. B) The owner has the right but specific price. C) The owner has the obligation to buy er has the right (but not the obligation) to sell an asset at a has the obligation to buy an asset at a specific price. D)...
pls answer all
Which stock should have the higher price? ALL ELSE EQUAL Stock A has a required return of 11% Stock Bhas a required return of 10% 5. Stock A has a dividend of $2. 6. Stock A has a dividend growth rate of 696 Stock B has a dividend of 54 Stock B has a dividend growth rate of 4% 7. Stock A has an expected price of $40 Stock Bhas an expected price of $30 Which stock...
Question31 Which of the following is a disadvantage of using standardized financial contracts as a risk management tool? they are typically cheaper to enter into, since they are standardized they are typically more expensive than customized contracts they are typically more liquid, and thus provide the potential to sell out of the position. their specifications may not provide a good match to the actual risk exposure being hedged. none of the above, i.e. all of the above are either advantages...
1. Which of the following trades implies that ownership has been taken? a. Buying a futures contract. b. Selling a futures contract. c. Buying a stock. d. Shorting a stock. e. None of the above implies ownership. The following transactions are the only ones made during the first 4 days a futures contract trades. Answer question 2 based on this table. DAY TRANSACTION S O 1 A Long 30, B Short 30 2 A Long 55, C Short 55 3...
Read below and answer, Why does a business that has profit of
$30,000 per year need a bank loan?
Jones Electrical Distribution After several years of rapid growth, in the spring of 2007 Jones Electrical Distribution anticipated a further substantial increase in sales. Despite good profits, the company had experienced a shortage of cash and had found it necessary to increase its borrowing from Metropolitan Bank-a local one- branch bank-to $250,000 in 2006. The maximum loan that Metropolitan would make...
Please read the facts of the case and prepare answers for the
following questions :
1 – What is the relevance of the $2,000 monthly payment
to Dave Verden on the analysis of Jones’ financing needs?
2 – What metrics could you use to compare the historical financial
results for Jones with the projected financial results under the
four defined scenarios?
3 – Other than financing needs, what other issues should Jones
address as he considers the different growth
scenarios?...
8. Which of the following accounts has a normal debit balance? a. Accounts Payable b. Sales Returns and Allowances c. Sales d. Interest Revenue 9. Using a perpetual inventory system, the entry to record the purchase of $30,000 of merchandise on account would include a a. debit to Sales b. debit to Merchandise Inventory c. credit to Merchandise Inventory d. credit to Sales 10. A retailer purchases merchandise with a catalog list price of $15,000. The retailer receives a 30%...
Jennifer is interested in the mutual fund RBC U.S.
Index Fund – Series A. She has a few questions for
you before she buys this investment.
a) Does the reported fund’s return include the Management
Expense Ratio (MER) ? Yes or No
b) What type of fee is charged: No-load, Front-end load or a
Back-end load?
c) Is the status of this mutual fund classified as a closed-end
or open-end mutual fund?
d) Based on your response in c), explain...
Q1 Which of the following are included and which are excluded in calculating this year's GDP. Explain in each instance. a. A monthly scholarship cheque received by an economics student b. The purchase of an almost new tractor by farmer Kojo C. The cashing in of a savings bond d. An increase in business inventories e. Tim Horton's purchases a corner grocery store f. Fearless Qweenie Kong, a stuntwoman, purchases a life insurance policy for a billion dollars ($) g....
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