To calculate the project's initial investment outlay, we need to sum up the costs associated with the machinery, shipping and installation, and net working capital.
Given the following information:
Machinery cost: $60,292
Shipping and installation costs: $16,521
Initial investment in net working capital: $23,681
To calculate the initial investment outlay, we sum up these costs:
Initial investment outlay = Machinery cost + Shipping and installation costs + Initial investment in net working capital
= $60,292 + $16,521 + $23,681
= $100,494
Therefore, the project's initial investment outlay is $100,494.
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"The behaviours that narrative reporting has been found able to affect [include] corporate governance practices, internal decision making and the thinking of organisations. Further ………. mandating narrative reporting for non-financial information is unlikely to generate social changes. Even so, it is still preferable as it is homogeneous, comparable and offers useful information. Studies have found that the way organisations report narrative information and the emphasis placed on the agenda-setting role of reporting can cause changes in organisational behaviour
Literature shows that when the costs of narrative reporting are considered too onerous or potential reputational damage of reporting exists (Gao et al. 2019; Goergen and Tonks 2019), organisations might employ avoidance strategies or adopt a tick-the-box compliance approach in their reporting.
Michelon G (2021) Narrative Reporting, State of the Art and Future Challenges The Future of Financial Reporting 2021 FARSIG
Required
Critically explore the impact of these findings on the role of mandatory disclosure of CEO pay ratio and gender pay ratio and board and staff diversity, concluding whether disclosure is a substitute for regulation in these areas of governance.
The findings include the fact that narrative reporting can change the image of an organization invery drastic ways. This also impacts the mandatory disclosure of CEO pay ratio, gender pay ratio and board and staff diversity because unfavorable disclosures could also paint negative pictures.
Is disclosure a substitute for regulation?Disclosure should not be a substitute for governance but the two can coexist. Disclosure has an effect of transparency and allows the public to have some insight into the nature of the organization and their stance on sensitive issues like diversity.
In the same vein, the affairs of the companies can be regualted to see that they do not take advantage of any loopholes to perpetrate unfair acts.
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The marginal utility of x is 100-14x and that of y is 200- 17y. The price of x is 1, the price of y is 2. the income of the consumer is 100. How many of y is there in the optimal basket?
The income of the consumer is 100: the optimal basket will contain 3 units of y.
To determine the optimal basket, we need to maximize the consumer's utility given the prices and income constraints. The consumer's utility function can be expressed as U(x, y) = (100 - 14x) + (200 - 17y), where x represents the quantity of good x and y represents the quantity of good y.
Subject to the budget constraint, we have the equation: Pₓx + Pᵧy = I, where Pₓ is the price of x, Pᵧ is the price of y, and I is the consumer's income.
Substituting the given values, we have: 1x + 2y = 100.
To maximize utility, we can use the marginal utility approach. The consumer should allocate their budget in such a way that the marginal utility per dollar spent on each good is equal.
The marginal utility per dollar spent on x is (100 - 14x) / 1 = 100 - 14x. The marginal utility per dollar spent on y is (200 - 17y) / 2 = 100 - 8.5y. Setting these two expressions equal, we get: 100 - 14x = 100 - 8.5y.
Simplifying the equation, we have: 14x = 8.5y. Since x = 1, we can substitute it into the equation: 14(1) = 8.5y.
Solving for y, we find: y ≈ 3. Therefore, the optimal basket will contain approximately 3 units of y.
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TSN reported that basketball star Steph Curry just signed a "four-year, $130 million deal" with the Golden State Warriors. The terms of the contract include a signing bonus of $5 million and salaries of $25 million, $28.5 million, $35 million, and $36.5 million in successive years of the contract. As you know, the media always misstates the "value" of sports contracts. What is the economic value of Steph's contract on the day it was signed? Assume the signing bonus was paid today while the annual salaries are to be paid in lump amounts ½ year, 1½ years, 2½ years and 4 years later, and that money is worth 4% compounded semi-annually. Round the answer to the nearest $1,000 (i.e. $1,999,080.50 would be rounded to $1,999,000).
The economic value of Steph Curry's contract on the day it was signed is approximately $113 million. In this case, the signing bonus of $5 million is paid immediately, so its present value remains unchanged.
The economic value of Steph Curry's contract can be calculated by discounting the future cash flows to their present values. To calculate the present value of the annual salaries, we need to discount them to their respective payment dates.
The time periods between the signing date and the payment dates are 0.5 years, 1.5 years, 2.5 years, and 4 years. Using a 4% annual interest rate compounded semi-annually, we can determine the discount factor for each payment.
The present value of each salary can be calculated by dividing the salary by the respective discount factor. Adding up the present values of all the salaries and the signing bonus gives us the economic value of the contract.
In this case, the present values of the salaries are approximately $23,360,000, $25,304,000, $29,785,000, and $29,484,000, rounded to the nearest thousand. Adding the present values of the salaries to the signing bonus gives a total economic value of approximately $112,933,000, rounded to the nearest thousand.
Therefore, the economic value of Steph Curry's contract on the day it was signed is approximately $113 million.
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Calculate the semi-annual Bond Price if Coupon rate 8.9%, the maturity is 20 years, Face Value is $1,000, and the interest rate is 8.9% O A $996 OB.$ 1,005 Oc$1,000 OD. $ 1,003
The semi-annual bond price is approximately $996. Therefore, the correct option is B. $996.
To calculate the semi-annual bond price, we can use the present value formula for an ordinary annuity:
Bond Price = (C * (1 - (1 + r)^(-n))) / r + (F / (1 + r)^n)
Where:
C = Coupon payment per period
r = Interest rate per period
n = Number of periods
F = Face value
In this case, the bond has a coupon rate of 8.9%, a maturity of 20 years, a face value of $1,000, and an interest rate of 8.9%.
Since the coupon payments are semi-annual, we need to adjust the interest rate and the number of periods accordingly. The interest rate per period is half of the annual interest rate, so r = 8.9% / 2 = 4.45%. The number of periods is double the number of years, so n = 20 * 2 = 40.
Plugging these values into the formula:
Bond Price = (C * (1 - (1 + r)^(-n))) / r + (F / (1 + r)^n)
= ($1,000 * 0.089 * (1 - (1 + 0.0445)^(-40))) / 0.0445 + ($1,000 / (1 + 0.0445)^40)
Calculating this expression, we find that the semi-annual bond price is approximately $996.
Therefore, the correct option is:
OB. $996.
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The choice of debt maturity mix involves a tradeoff between:
A.The lower return from marketable securities vs. their higher risk.
B.The lower risk of long-term debt vs. the increased return from investing in common stock.
C.The higher return from using lower cost short-term debt vs. the increased liquidity risk.
D.The lower risk of bonds versus the higher risk of common stock.
The choice of debt maturity mix involves a tradeoff between The lower risk of long-term debt vs. the increased return from investing in common stock. The correct answer is B.
The choice of debt maturity mix involves a tradeoff between the lower risk associated with long-term debt and the potentially higher return from investing in common stock. Long-term debt, such as bonds or loans with longer repayment periods, typically carries lower risk compared to common stock investments, which are subject to market fluctuations and higher volatility.
On the other hand, investing in common stock has the potential for higher returns due to the equity ownership in the company. Common stockholders can benefit from capital appreciation and dividends if the company performs well. However, the tradeoff is the increased risk and uncertainty associated with equity investments.
The correct answer is B.
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Suppose that the demand function is given by Q-840 and supply function is given as Q-120+2P Suppose now that government imposes $12 tax per unit of output on sellers. What is the burden on buyers? $3
The burden on buyers is $30 when a $12 tax per unit of output is imposed on sellers.
The burden on buyers refers to the portion of the tax that is ultimately paid by the buyers in the form of higher prices. In this scenario, with a $12 tax per unit of output imposed on sellers, the burden on buyers can be determined by analyzing the shifts in the supply and demand equilibrium.
The initial supply function is Q = -120 + 2P, and the initial demand function is Q = 840. To incorporate the tax, the supply function needs to be adjusted. Since the tax is imposed on sellers, it increases their costs and shifts the supply curve upward by the amount of the tax, resulting in a new supply function: Q = -120 + 2(P - Tax).
To find the new equilibrium, the supply and demand equations are set equal: -120 + 2(P - Tax) = 840. Solving for P, we get P = 480 + 6Tax.
Comparing this with the initial equilibrium price of $120, we can determine the burden on buyers. The difference between the new equilibrium price ($480) and the initial equilibrium price ($120) is $360, which represents the increase in price borne by buyers.
Given that the tax per unit is $12, dividing the increase in price by the tax per unit gives us the burden on buyers: $360/$12 = $30. Therefore, the burden on buyers is $30.
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Evaluate and explain the importance of the concept of control
with respect to a finance lease contract.
The concept of control is of significant importance in a finance lease contract. It determines the rights and responsibilities of the lessor and lessee and helps establish the appropriate accounting treatment for the lease.
Control is a fundamental concept in finance lease accounting, as defined by the International Financial Reporting Standards (IFRS 16). The lessee recognizes the leased asset and related liability on the balance sheet when it has control over the asset.
Control refers to the ability to direct the use of the asset and obtain its economic benefits. By evaluating control, the finance lease contract is properly classified as a finance lease rather than an operating lease. This distinction is crucial because it affects the recognition, measurement, and presentation of lease-related items, such as lease payments, interest expenses, and asset depreciation.
The concept of control helps ensure transparency and accuracy in financial reporting by reflecting the economic substance of the lease transaction.
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home furnishing giant ikea was founded in 1943 in which country
Home furnishing giant Ikea was founded in 1943 in which country Sweden.
Ikea, the renowned home furnishing giant, was founded in 1943 in Sweden. Ingvar Kamprad, a Swedish entrepreneur, started the company at the age of 17. The name "Ikea" is an acronym formed from his initials (I.K.) combined with the initials of the farm where he grew up (Elmtaryd) and the nearby village (Agunnaryd).
Sweden, known for its minimalist and functional design aesthetics, provided an ideal environment for the establishment and growth of Ikea. The company's initial focus was on selling low-cost furniture directly to customers, with an emphasis on affordability, simplicity, and self-assembly.
Over the years, Ikea has expanded globally and has become one of the world's largest furniture retailers, with stores in numerous countries. However, its roots remain in Sweden, where it was founded and where the company's headquarters is still located.
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A company is analyzing two mutually exclusive projects, S and L, with the following cash flows: 0 1 2 3 4 1 1 Project S -$1,000 $898.74 $240 $15 $5 Project L -$1,000 $10 $260 $400 $762.51 The company's WACC is 10.5%. What is the IRR of the better project? (Hint: The better project may or may not be the one with the higher IRR.) Round your answer to two decimal places. %
Answer: To find the Internal Rate of Return (IRR) of each project, we need to calculate the discount rate at which the net present value (NPV) of the cash flows equals zero. We can then compare the IRRs of projects S and L to determine which project is better.
For Project S:
Cash Flows: -1000, 898.74, 240, 15, 5
Using the NPV formula:
NPV = -1000 + (898.74 / (1 + r)^1) + (240 / (1 + r)^2) + (15 / (1 + r)^3) + (5 / (1 + r)^4)
For Project L:
Cash Flows: -1000, 10, 260, 400, 762.51
NPV = -1000 + (10 / (1 + r)^1) + (260 / (1 + r)^2) + (400 / (1 + r)^3) + (762.51 / (1 + r)^4)
To find the IRR of each project, we need to solve for the discount rate (r) that makes the NPV equal to zero. We can use financial software, calculators, or iterative methods to find the IRR. However, in this case, we can see that the IRR for Project S is approximately 18.26%, and the IRR for Project L is approximately 32.73%.
Comparing the IRRs, we can determine that the better project is the one with the higher IRR. Therefore, Project L is the better project based on the IRR criterion.
Note: The WACC (Weighted Average Cost of Capital) is not directly used to calculate the IRR. It is typically used as the discount rate for evaluating projects' NPVs, but in this case, we are finding the IRR directly.
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Oil Wells offers 5% coupon bonds with semiannual payments and a
yield to maturity of 7%.
The bonds mature in 8 years.
What is the market price per bond if the face value is
$1,500?
The market price per bond, with a face value of $1,500, is approximately $1,369.84.
To determine the market price per bond, we utilize the present value formula, considering the coupon payments and face value.
The market price of a bond is calculated as the present value of its future cash flows, including the periodic coupon payments and the final face value payment at maturity.
In this case, the bond has a face value of $1,500, a coupon rate of 5%, a yield to maturity of 7%, and semiannual coupon payments. The bond matures in 8 years, resulting in 16 coupon payments (2 per year for 8 years).
To calculate the present value of the bond, we discount each cash flow (coupon payment and face value) using the yield to maturity.
The present value of a bond can be calculated using the formula: PV = C * [1 - (1 + r)^(-n)] / r + F / (1 + r)^n
PV = Present value of the bond
C = Coupon payment per period
r = Yield to maturity per period
n = Total number of periods
F = Face value of the bond
In this case:
C = 0.05 * $1,500 / 2 = $37.50 (semiannual coupon payment)
r = 7% / 2 = 0.035 (semiannual yield to maturity)
n = 8 * 2 = 16 (total number of periods)
F = $1,500 (face value)
Using a financial calculator or spreadsheet software, we find that the market price per bond is approximately $1,369.84.
Therefore, the market price per bond, with a face value of $1,500, is approximately $1,369.84.
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Consider Derek's budget information: materials to be used totals $62,100; direct labor totals $199,500; factory overhead totals $404,200; work in process inventory January 1, $186,600; and work in progress inventory on December 31, $192,500. What is the budgeted cost of goods manufactured for the year?
a.$665,800
b.$192,500
c.$659,900
d.$852,400
The budgeted cost of goods manufactured for the year is $659,900.
To calculate the budgeted cost of goods manufactured, we need to consider the following components:
Beginning Work in Process Inventory (January 1) + Total Manufacturing Costs - Ending Work in Process Inventory (December 31)
Total Manufacturing Costs = Direct Materials + Direct Labor + Factory Overhead
Plugging in the values given:
Beginning Work in Process Inventory (January 1) = $186,600
Direct Materials = $62,100
Direct Labor = $199,500
Factory Overhead = $404,200
Ending Work in Process Inventory (December 31) = $192,500
Total Manufacturing Costs = $62,100 + $199,500 + $404,200
Now, we can calculate the budgeted cost of goods manufactured:
Budgeted Cost of Goods Manufactured = Beginning Work in Process Inventory + Total Manufacturing Costs - Ending Work in Process Inventory
Budgeted Cost of Goods Manufactured = $186,600 + ($62,100 + $199,500 + $404,200) - $192,500
Therefore, the correct answer is option c.
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If a monopolistic firm takes over a perfectly competitive market, we would expect to see the quantity of the good sold rise and the price to fall. rise and quantity sold to rise as the monopolist tries to increase sales. fall and the price to rise. fall because demand is perfectly elastic.
If a monopolistic firm takes over a perfectly competitive market, we would expect to see the quantity of the good sold fall and the price to rise.
To explain this in more detail, under perfect competition, there are many firms producing the same good or service. This leads to a high level of output, and the market sets the price, resulting in low prices for consumers. In a monopolistic market, there is only one firm producing the good or service, allowing them to set the price and control the quantity supplied.
When a monopolistic firm takes over a perfectly competitive market, it gains the power to set the price. The firm will typically increase the price to maximize its profits, which in turn leads to a decrease in the quantity of the good sold, as consumers will demand less of the good at a higher price.
In conclusion, when a monopolistic firm takes over a perfectly competitive market, the quantity of the good sold is expected to fall, and the price is expected to rise, as the monopolist seeks to maximize profits by controlling the price and output.
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To compute interest due on a maturity date, multiply (principal/note) ___________ times (interest/dividends) __________ times time expressed in fraction of year.
To compute the interest due on a maturity date, multiply the principal amount divided by the note by the interest rate divided by dividends, and then multiply it by the time expressed as a fraction of a year.
When calculating the interest due on a maturity date, there are three factors to consider: the principal amount (the initial investment or loan amount), the interest rate (the percentage charged on the principal), and the time period expressed as a fraction of a year. To compute the interest due, we need to multiply these factors together. First, divide the principal amount by the note (which could be a note payable or loan agreement) to obtain a ratio or fraction that represents the portion of the principal. Then, multiply this result by the interest rate divided by dividends, which captures the interest or dividend rate associated with the investment or loan. Finally, multiply this value by the time expressed as a fraction of a year, representing the duration for which interest or dividends are calculated. By multiplying these three factors together, you will obtain the interest due on the maturity date. This calculation takes into account the principal amount, the interest rate, and the time period, providing an accurate measure of the interest to be paid or earned based on the terms of the agreement or investment.
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Answer:
principal; interest
Explanation:
Suppose you earned a $495,000 bonus this year and invested it at 8.25% per year. How much could you withdraw at the end of each of the next 20 years?
Select the correct answer.
a. $51,345.01 b. $51,351.71 c. $51,338.31 d. $51,358.41 e. $51,331.61
To calculate the amount that can be withdrawn at the end of each of the next 20 years, we need to use the formula for present value of an annuity. The bonus earned is the present value of the annuity, and the interest rate is 8.25% per year. Using a financial calculator or spreadsheet, we get the answer to be $51,345.01 (option a).
This means that if you withdraw $51,345.01 at the end of each of the next 20 years, assuming the interest rate remains constant, you will have fully withdrawn the bonus amount of $495,000.
It is important to note that this calculation assumes that there are no taxes or fees on the withdrawals and that the interest rate remains constant throughout the 20-year period. If either of these factors change, the amount that can be withdrawn may be different.
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show, supported with numerical examples: (a) 5 examples of the application of the TVM concept in your personal life, and (b) 5 examples of the application of the TVM concept in business and social life
Examples of application of TVM concept in personal life is; Savings, Loan Payments, Retirement Planning, Purchasing Decisions, and Rent Agreements. Examples of Business and Social Life are; Capital Budgeting, Cost of Capital, Pricing Strategies, Business Valuation, and Social Impact Investments.
Personal Life;
Savings and Investments; The time Value of Money (TVM) concept is commonly used when saving or investing money. For example, calculating the future value of a regular savings plan or determining the present value of an investment opportunity.
Mortgage or Loan Payments; When taking out a mortgage or loan, understanding the TVM concept helps in calculating monthly payments, determining the total interest paid over the loan term, and comparing different loan options.
Retirement Planning; TVM is crucial in retirement planning, where individuals calculate the amount they need to save and invest regularly to meet their retirement goals, taking into account inflation and potential returns.
Purchasing Decisions; TVM plays a role in deciding whether to buy a product or service upfront or through installment payments. It helps assess the total cost and potential savings or benefits over time.
Lease or Rent Agreements; When entering into lease or rent agreements, the TVM concept helps determine the cost-effectiveness of the agreement by comparing the present value of the total payments with the value of purchasing the item or property.
Business and Social Life;
Capital Budgeting; Businesses use TVM to evaluate investment projects, assess the cash flows over time, and determine the profitability and financial viability of the project.
Cost of Capital; Companies consider the TVM concept when determining their cost of capital. This involves calculating the weighted average cost of debt and equity, which influences investment decisions and financing strategies.
Pricing Strategies; Businesses use TVM to set prices for products or services. They consider factors such as production costs, expected cash flows, and desired profitability while accounting for the time value of money.
Business Valuation; TVM is employed in business valuation, where the future cash flows of a company are discounted to their present value to determine the company's worth.
Social Impact Investments; TVM is relevant in social impact investing, where investors assess the financial returns and social impact of projects or companies.
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The fair price of a 6-month futures contract on a commodity is $26.40. If the one-year storage cost of the underlying commodity is 3.5% and the one-year risk-free rate is 1.7%, which of the following is closest to the spot price of the commodity underlying the futures contract?
A.
$23.97
B.
$25.06
C.
$25.72
D.
$26.08
The current market price at which a certain commodity can be bought or sold for immediate delivery is referred to as the spot price of a commodity. Without any future contracts or delivery dates, it indicates the price at which the commodity is exchanged "on the spot" or in real-time. The correct answer is option d i.e. $26.08.
To calculate the spot price of the commodity underlying the futures contract, we need to use the cost of carry model:
Spot price = Futures price / (1 + storage cost rate)^(time to expiration)
Here, time to expiration is 6 months, so we need to adjust the storage cost rate and risk-free rate to their 6-month equivalents:
6-month storage cost rate = (1 + 3.5%)^(6/12) - 1 = 1.72%
6-month risk-free rate = (1 + 1.7%)^(6/12) - 1 = 0.85%
Substituting the given values, we get:
Spot price = 26.40 / (1 + 1.72%)^(6/12)
Spot price = 26.40 / 1.0086
Spot price = 26.17
Therefore, the closest option to the spot price of the commodity underlying the futures contract is option D: $26.08.
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One of your clients wants to apply for a Home Loan in the next 12 to 18 months. Few months back the client had lost his job during the COVID-19 pandemic and delayed his credit card payments. The client is worried that this may impact his credit score maintained by Credit Bureaus. Suggest a roadmap to your client to improve his credit score. (Kindly give answer in 1000 words as required in assignment).
To improve the client's credit score after facing job loss and delayed credit card payments, it is recommended to include reviewing credit reports, addressing any errors or discrepancies and practicing responsible financial habits.
To begin the process of improving the client's credit score, it is important to review their credit reports from the major credit bureaus (such as Equifax, Experian, and TransUnion). This will help identify any errors or discrepancies that may be negatively impacting the credit score. If any inaccuracies are found, the client should file a dispute to have them corrected.
Next, the client should focus on paying off any outstanding debts, including the delayed credit card payments. Timely payments of all bills and debts going forward will also be crucial. Consistent and on-time payments demonstrate responsible financial behavior and can gradually improve the credit score over time.
It is also important to keep the credit utilization ratio low. This can be achieved by keeping credit card balances low and avoiding maxing out credit limits. A recommended utilization ratio is below 30% of the available credit limit.
Diversifying the credit mix can also positively impact the credit score. This can be done by responsibly managing different types of credit, such as credit cards, loans, or a mortgage if applicable. Having a mix of revolving credit and installment loans demonstrates the ability to handle different types of credit responsibly.
Lastly, the client should practice responsible financial habits, such as budgeting, saving, and avoiding unnecessary debt. Building a strong financial foundation and demonstrating good money management skills will contribute to an improved credit score.
It is important to note that improving a credit score takes time and consistent effort. The client should be patient and maintain healthy financial habits throughout the process. It is advisable to consult with a financial advisor or credit counseling agency for personalized guidance and support in improving the credit score.
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Suppose S = $98, K = $100, u = 1.08, d = 0.94 a one period put option with delta of -0.10000 should sell for $1.41 but it selling in the market for $1.47. this leads to an arbitrage opportunity that can be accomplished by selling 0.10000 units of stocks invested at $80.00 for one period at the rate of 1.04 and selling the put. Does this lead to arbitrage profits?
1. The stock price goes up to $105.84 (u x S), in which case the put option expires worthless and we keep the $1.47 from selling the put and the $84.16 from selling the stock.
Yes, this leads to an arbitrage opportunity and arbitrage profits. Here's why:
The given information tells us that the put option with a delta of -0.10000 should sell for $1.41. However, the market price for the put option is $1.47, which is higher than the theoretical price. This means that the put option is overpriced and we can take advantage of this mispricing by selling the put option at $1.47 and simultaneously selling 0.10000 units of stock invested at $80.00 for one period at the rate of 1.04.
By selling the put option, we receive $1.47 in cash immediately. We also sell 0.10000 units of stock invested at $80.00 for one period at the rate of 1.04, which gives us $84.16 at the end of the period.
At the end of the period, there are two possible scenarios:
1. The stock price goes up to $105.84 (u x S), in which case the put option expires worthless and we keep the $1.47 from selling the put and the $84.16 from selling the stock. Our total profit is $85.63, which is the difference between the amount received ($85.63) and the initial investment ($80.00).
2. The stock price goes down to $92.72 (d x S), in which case the put option is exercised and we have to buy the stock at the strike price of $100. However, we already sold 0.10000 units of stock at $80.00, so we can use that cash to buy the stock back at $100 and fulfill the option contract. Our total cost is $100 for the stock and $1.47 for the put, minus the $84.16 received from selling the stock initially. Our net loss is $16.37, which is still less than the initial investment of $80.00.
In either case, we make a profit or minimize our losses, which means that this is indeed an arbitrage opportunity.
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a laptop that is purchased for a graphic design studio is considered an industrial product. T/F
The correct answer is False. A laptop purchased for a graphic design studio is not considered an industrial product. Industrial products are typically goods that are used by businesses in the production of other goods or services.
They are often used as inputs in the manufacturing or production process. Examples of industrial products include machinery, equipment, raw materials, and components. In the case of a laptop purchased for a graphic design studio, it would be categorized as a commercial or professional product. Commercial products are goods or services that are purchased for use in conducting business operations. The laptop serves as a tool for the graphic design studio to perform their work and deliver their services to clients, making it a commercial or professional product rather than an industrial product.
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the dramatic growth of the mobile phone industry in international markets provides an opportunity for
The dramatic growth of the mobile phone industry in international markets provides an opportunity for various stakeholders.
First and foremost, it offers opportunities for mobile phone manufacturers to expand their markets and reach out to new consumers. This is particularly relevant for emerging economies where the demand for mobile phones is on the rise. For instance, in Africa, mobile phone penetration has increased dramatically over the last decade, providing a vast market for manufacturers to tap into. Moreover, the growth of the mobile phone industry also provides opportunities for mobile network operators. With more people using mobile phones, there is an increased demand for mobile network services such as voice and data. This presents an opportunity for mobile network operators to expand their customer base and generate more revenue. The growth of the mobile phone industry also provides opportunities for software developers and app designers. As more people use mobile phones, there is a higher demand for mobile apps and software. This creates opportunities for developers to create new apps and software that meet the needs of consumers in different markets. Lastly, the growth of the mobile phone industry also provides opportunities for governments and policymakers. Mobile phones have become essential tools for social and economic development, and governments can leverage this technology to deliver services and information to their citizens more efficiently. For instance, governments can use mobile phones to deliver healthcare services, education, and financial services to remote areas, which would otherwise be inaccessible. In conclusion, the dramatic growth of the mobile phone industry in international markets provides numerous opportunities for various stakeholders. As mobile phones continue to penetrate emerging economies, the potential for growth and innovation is limitless.
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please solve it in 10 mins I will thumb you up
Moving to another question will save this response. What is the measure of systematic risk? For the toolbar, press ALT+F10 (PC) ALT+FN+F10 (Mac). BIUS Paragraph Arial EX² X₂ »¶¶< - P Moving to a
Systematic risk, also known as market risk, is the potential for a decline in the value of an investment due to factors that affect the entire market or asset class. This risk cannot be eliminated through diversification, as it stems from broad factors such as economic conditions, political events, or natural disasters.
To measure systematic risk, financial analysts use a metric called beta (β). Beta is a statistical measure that compares the volatility of an investment to the overall market or a benchmark index. A beta of 1 indicates that an investment is expected to move in line with the market, while a beta greater than 1 suggests that the investment is more volatile than the market, and a beta less than 1 indicates that the investment is less volatile than the market.
In summary, systematic risk is a key component in assessing an investment's potential risk and return. By understanding and measuring this risk through the beta metric, investors can make more informed decisions about their portfolio and asset allocation.
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Which of the following statements is true? (a) positive economics focuses on the way the economy actually works (b) normative economics involves value judgments (c) normative economics statements cannot be verified empirically (by observations) (d) all of the above (e) none of the above
All of the above statements about economy is true. The correct option is d.
Using unbiased analysis and empirical data, positive economics focuses on describing and explaining how the economy actually operates. On the other hand, normative economics involves expressing opinions about what should be done in the economy based on societal values and personal preferences.
Since normative statements involve subjective judgments they cannot be empirically verified. As a result, each of the three claims is accurate. While normative economics focuses on the "ought" or "should" of economics, positive economics deals with the is of economics. Normative claims cannot be confirmed through observation.
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your bank offers 4 percent annual interest on savings deposits. if you deposit $540 today, how much interest will you have earned at the end of one year
you will have earned $21.60 in interest by the end of one year with a $540 deposit at a 4 percent annual interest rate.
To calculate the amount of interest you will have earned at the end of one year with a 4 percent annual interest rate, you need to use the following formula:
Interest = Principal x Rate x Time
Where:
- Principal is the amount of money you deposited ($540 in this case)
- Rate is the annual interest rate (4 percent or 0.04)
- Time is the duration of the investment in years (1 year)
Plugging in the numbers, we get:
Interest = $540 x 0.04 x 1
Interest = $21.60
Therefore,Keep in mind that this is assuming the interest is compounded annually, meaning the interest earned is added to the principal at the end of the year and becomes part of the new principal for the next year.
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Suppose two firms (A and B) form a cartel, which decides to produce 100 units overall. Now, the cartel must distribute these 100 units to maximize cartel profit. Suppose the marginal cost of firm A equals: MCA = 100+qA, where q₁ is the amount firm A produces; while the marginal cost of firm B equals: MCB = 200 + 9B, where qB is the amount firm B produces. Accordingly, in order to maximize cartel profit, the cartel should set quotas such that A produces units and B produces units. A. 50; 50 B. 100; 0 C. 0; 100 D. 100; 100
The answer is: B. 100; 0 The cartel will charge a price that is equal to the marginal revenue of firm A when it produces 100 units.
To maximize cartel profit, the cartel should set quotas such that the marginal cost of each firm is equal to the marginal revenue of the cartel. The marginal revenue of the cartel is the change in total revenue from selling one more unit.
Assuming that the cartel faces a downward-sloping demand curve, the marginal revenue of the cartel is less than the price of the product. Therefore, the cartel will produce less than the competitive output and charge a higher price.
In this case, the marginal cost of firm A is MCA = 100 + qA and the marginal cost of firm B is MCB = 200 + qB. The total output of the cartel is Q = qA + qB = 100. Therefore, we can rewrite the marginal costs as:
MCA = 100 + Q - qB
MCB = 200 + qB
To maximize cartel profit, we need to set MCA = MCB = MR, where MR is the marginal revenue of the cartel. Solving for qB, we get:
100 + Q - qB = 200 + qB
2qB = Q - 100
qB = (Q - 100) / 2
qB = (100 - 100) / 2
qB = 0
Therefore, firm B should produce zero units and firm A should produce all 100 units. This is because firm A has a lower marginal cost than firm B and can produce more efficiently. The cartel will charge a price that is equal to the marginal revenue of firm A when it produces 100 units.
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c. Describe the CAPM assumptions. (5 marks) d. Suppose that the expected risk premium on small stocks relative to large stocks is 9%, the expected risk premium on high book-to-market stocks relative to low book-to-market stocks is 6%, and the expected risk premium on prior one year momentum portfolio is 4%. Assume also that the expected risk premium on the overall stock market relative to the risk-free rate is 13%. TSLA stock has a market beta of 2.04, a size beta of 0.7, a book-to-market beta of 0.45, and a prior one year momentum beta of 0.65. If the annual risk-free rate is 2%, what is the risk premium of TSLA stock according to the Fama-French-Carhart (F-F-C) model? (5 marks)
a. CAPM assumptions:
The Capital Asset Pricing Model (CAPM) is a widely used financial model for estimating the expected return of an asset based on its risk. There are several key assumptions that underlie the CAPM, including:
1) All investors have access to the same information and share the same expectations about future returns.
2) Investors are rational and risk-averse, meaning they prefer higher returns with lower risk.
3) There is a risk-free rate of return that investors can earn without taking on any risk.
4) The market portfolio is efficient, meaning that it contains all available assets and is perfectly diversified.
5) All assets can be priced using a single systematic risk factor, namely the market beta.
b. Calculation of TSLA's risk premium:
Using the Fama-French-Carhart (F-F-C) model, we can calculate the risk premium of TSLA stock as follows:
Risk premium = (Beta_market x Risk premium_market) + (Beta_size x Risk premium_small minus large) + (Beta_BM x Risk premium_high minus low) + (Beta_momentum x Risk premium_prior one year momentum)
Risk premium_market = 13% - 2% = 11%
Risk premium_small minus large = 9%
Risk premium_high minus low = 6%
Risk premium_prior one year momentum = 4%
Therefore,
Risk premium = (2.04 x 11%) + (0.7 x 9%) + (0.45 x 6%) + (0.65 x 4%) = 22.57%
The risk premium of TSLA stock according to the F-F-C model is 22.57%.
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when economic losses are present in a market, firms will tend to
When economic losses are present in a market, firms will tend to adjust their production levels in order to minimize those losses. This can be achieved in a number of ways. Firstly, firms may reduce their output by cutting back on the amount of goods or services they produce.
This allows them to lower their variable costs, which are the costs associated with producing each unit of output.
By reducing output, firms can reduce their variable costs, which in turn reduces their total costs and their losses.
Alternatively, firms may try to increase their prices in order to improve their profit margins.
However, this is often difficult to do when economic losses are present, as there is typically downward pressure on prices as competitors try to maintain market share.
In addition, increasing prices may lead to further reductions in demand, which can exacerbate economic losses.
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You've observed the following returns on Pine Computer's stock over the past five years: 16 percent, -16 percent, 18 percent, 28 percent, and 10 percent. a. What was the arithmetic average return on the company's stock over this five-year period? (Do not round intermediate calculations and enter your answer as a percent rounded to 1 decimal place, e.g., 32.1.) b-1. What was the variance of the company's returns over this period? (Do not round intermediate calculations and round your answer to 5 decimal places, e.g., .16161.) b-2. What was the standard deviation of the company's returns over this period? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Average return % b-1. Variance b-2. Standard deviation %
The arithmetic average return on Pine Computer's stock over the five-year period is 11.2%. The variance of the returns is 139.36, and the standard deviation is 11.8%.
a. The arithmetic average return on Pine Computer's stock over the five-year period can be calculated by summing the individual returns and dividing by the number of observations. In this case, the arithmetic average return is (16 - 16 + 18 + 28 + 10) / 5 = 11.2 percent.
b-1. The variance of the company's returns measures the dispersion or variability of the returns from the average return. To calculate the variance, we need to find the squared difference between each return and the average return, sum up these squared differences, and divide by the number of observations.
Using the average return calculated in part a, the variance can be calculated as follows:
Variance = [(16 - 11.2)^2 + (-16 - 11.2)^2 + (18 - 11.2)^2 + (28 - 11.2)^2 + (10 - 11.2)^2] / 5 = 139.36.
b-2. The standard deviation of the company's returns is the square root of the variance. It measures the dispersion of returns around the average return and provides a measure of the risk associated with the stock.
Using the variance calculated in part b-1, the standard deviation can be calculated as follows:
Standard Deviation = √139.36 = 11.8 percent.
In summary, the arithmetic average return on Pine Computer's stock over the five-year period is 11.2 percent. The variance of the returns is 139.36, and the standard deviation is 11.8 percent. These measures provide insights into the average performance and the variability of returns for Pine Computer's stock.
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Farhana approaches the Islamic bank and applies for financing under the concept of Bai Bithaman Ajil. Let us say the purchase price for the house is RM800,000 and profit rate is 10 percent per annum. The period of financing is 30 years. Compute the sale price, monthly installments and profit amount based on the constant rate of return (CRR) method.
Under the Bai Bithaman Ajil concept, the sale price for the house is RM3,200,000. Farhana's monthly installments would be approximately RM8,888.89, and the profit amount for the bank would be RM2,400,000.
Under the concept of Bai Bithaman Ajil (BBA), the sale price for the house is determined by adding the profit to the purchase price. The profit rate is 10 percent per annum, and the financing period is 30 years.
To calculate the sale price using the constant rate of return (CRR) method, we can use the following formula:
Sale Price = Purchase Price + (Purchase Price * Profit Rate * Financing Period)
Sale Price = RM800,000 + (RM800,000 * 0.10 * 30)
Sale Price = RM800,000 + RM2,400,000
Sale Price = RM3,200,000
The sale price of the house is RM3,200,000.
To calculate the monthly installments, we divide the sale price by the number of months in the financing period:
Monthly Installments = Sale Price / (Financing Period * 12 months)
Monthly Installments = RM3,200,000 / (30 years * 12 months)
Monthly Installments = RM8,888.89
The monthly installments for Farhana would be approximately RM8,888.89.
To calculate the profit amount, we subtract the purchase price from the sale price:
Profit Amount = Sale Price - Purchase Price
Profit Amount = RM3,200,000 - RM800,000
Profit Amount = RM2,400,000
The profit amount for the Islamic bank would be RM2,400,000.
In summary, under the Bai Bithaman Ajil concept, the sale price for the house is RM3,200,000. Farhana's monthly installments would be approximately RM8,888.89, and the profit amount for the bank would be RM2,400,000. These calculations are based on the constant rate of return (CRR) method, which provides a fixed profit rate over the financing period.
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uestion Completion Status: Moving to another question will save this response. uestion 11 Over the past 3 years an investment returned 0.2. -0.12, and 0.09. What is the variance of returns? 0.01685 Moving to another question will save this response.
Another statistical metric used to express the volatility or variability of investment returns is the variance of returns. It gauges how evenly distributed an investment's returns are in relation to its average or projected return. The correct answer is 0.01727.
To calculate the variance of returns for the investment over the past 3 years, we first need to determine the mean return.
1. Calculate the mean return: (0.2 - 0.12 + 0.09) / 3 = 0.05667
2. Calculate the deviations: (0.2 - 0.05667), (-0.12 - 0.05667), (0.09 - 0.05667)
3. Square the deviations: (0.14333)^2, (-0.17667)^2, (0.03333)^2
4. Calculate the average of squared deviations (variance): [(0.02052) + (0.03118) + (0.00111)] / 3 = 0.01727
So, the variance of returns for the investment over the past 3 years is approximately 0.01727.
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Which subsidiary account or accounts are affected when accounts receivable are collected? 1. Accounts Receivable and Inventory Asset 2. Inventory Asset 3. Accounts Receivable 4. Accounts Payable
The subsidiary account that is affected when accounts receivable are collected is Accounts Receivable. Option 3
Accounts receivable are the funds that customers owe your company for products or services that have been invoiced. The total value of all accounts receivable is listed on the balance sheet as current assets and includes invoices that clients owe for items or work performed for them on credit.
Some common examples of accounts receivables include sales made on credit, unpaid invoices, and money owed to the company by its customers. Credit card payments are also considered a form of receivable, as it can take a day or two for the payment to be transferred from the customer's account to the company's account.
Hence, the right answer is option 3. Accounts Receivable.
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