Define short hedges

Q: Define Continuous probability distribution

A: Probability Distribution: It is the list of values where each outcome is linked with the…

Q: Define asset-backed security

A: Answer: Asset backed security is nothing but a security is made up of other financial securities.…

Q: Explain breakeven analysis.

A:

Q: Reliability is a characteristic Convenience

A: Reliability refers to a term in accounting which implies that the investors and creditors can…

Q: Define Errors.

A: Accounting error means occurrence of mistakes which are committed while recording the transactions…

Q: Define symmetric hedge

A: Introduction: It is a technique that reduces risk, like currency fluctuations, stock price…

Q: Explain Anti-dilutive Security

A: Explanation to Securities Securities are referred to as the tradeable financial instruments which…

Q: What is the Security Market Line (SML) ?

A: Answer: A security market line (SML) is a line that representing the relationship between systematic…

Q: Explain pure expectations theory

A: It estimates the future interest without considering the maturity risk. According to the expectation…

Q: Explain what is risk decompositon

A: Risk is referred as the future uncertainty with reference to the deviation from an expected earnings…

Q: Explain compound interest.

A: Compound interest.

Q: Briefly explain the usefulness of a sensitivity graph

A: A sensitivity graph depicts all the assumption results on the final outcome in the exercise of…

Q: What is indifference curve?

A: Indifference curve: It is a diagram indicating a mix of two items that give equivalent fulfillment…

Q: and maint system?

A: Given information : Initial expenditure = $20 million Time period = 180 years Periodic expenses =…

Q: robability

A: Expected return can be defined as the return which is obtained by multiplying the potential outcome…

Q: Explain the drawbacks of IRR over MIRR with example?

A: Capital budgeting is part of investment decisions. Business firms consider capital budgeting in…

Q: Explain red herring

A: Red herring It is an introductory prospectus recorded with the Securities and Exchange Commission…

Q: What is a limit order?

A: Limit order It is such an order to buy or trade a security at or superior to a predefined cost. The…

Q: What is perfect hedge?

A: Hedge: A hedge is referred as an investment to decrease the risk of opposing price movements in an…

Q: Define continuity assumption

A: Accounting:   It refers to the process of recording the financial transactions of the business in…

Q: Define warrant

A: A warrant is a security that entitles a holder to buy the stock at a fixed price on a future date.…

Q: Formula for put call parity?

A: Put call parity Put-Call parity defines the value of same class European put and call options. Put…

Q: Define leverage

A: Financial accounting: Financial accounting is the process of recording, summarizing, and reporting…

Q: Define fair value hedges.

A:

Q: Define alpha value.

A: Alpha is a value that is used in computation of expected return from an investment. Expected return…

Q: Define asymmetric hedge

A: A strategy that helps to reduce the loss which occurs from the movement of the asset's price is term…

Q: Define efficient frontier

A: The efficient frontier is the collection of efficient portfolios, which provide the most expected…

Q: nformation technology has ha

A: IT is the development and management of an organization's processes, strategies, and functions based…

Q: outstandi

A: As per accounting rule when we purchase a capital asset , all revenue…

Q: Explain the accounting for hedges.

A: Hedge:   A hedge refers to a financial instrument that are used by investors to offset the potential…

Q: Define Security Market Line (SML

A: When the cost of equity obtained from CAPM model is graphically presented, it is known as Security…

Q: Define convertible security

A: A convertible security is a security that can be changed into another form of investment. The most…

Q: nost outspok of managen m.

A: The answer is  Milton Friedman

Q: What is long hedges?

A: The long hedge is the long future position in future contract. The long hedge is used to stabilize…

Q: Define spread, underwriting

A: Difference between two prices or rates can be called as spread. But spread has different meanings…

Q: How is VaR used to limit risk?

A: Value at Risk (VaR) a statistical tool which measures and quantifies financial risk a firm or…

Q: What is hurdle rate?

A: Hurdle rate a rate usually used in capital budgeting decisions to calculate the acceptability of a…

Q: Describe straight-line method with example.

A: Straight-line Depreciation: Under the straight-line method of depreciation, the same amount of…

Q: What does Security Market Line Capture?

A: Security market line (SML) is a straight line sloping upward depicting an expected rate of return as…

Q: what is the risk-free rate (rf)?

A: Risk free rate is also called as treasury bill rate. This treasury bill rates are free from default…

Q: Define broker

A: Broker is referred as a person or a firm, who used to arrange the transactions between the seller…

Q: Explain high-low method.

A: The highly-low approach of cost accounting is a system in which a limited volume of data is used to…

Q: Define Diluted EPS

A: Diluted EPS is a financial ratio to check the quality of the Earnings per Share after taking into…

Q: Define time line

A: Timeline is referred as the representation of a chronological sequence of events which is drawn such…

Q: Define value at risk (VaR)

A: Risk is referred as uncertainty or loss. Financial risk is referred as the variability of actual…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.