Explain the following terms, Bid Rate and Ask rate

Q: What is the IRR of this offer?

A: Capital budgeting methods are the used for finding the profitability of capital projects. It is a…

Q: Differentiate between price risk and reinvestment risk.

A: Price risk is the risk of decline of the price of the investment or an asset after the underlying…

Q: Define forward contract.

A: It is a form of derivative contract which is used as an agreement

Q: Under what conditions is a market-based transfer price most likely to be used?

A: Transfer Pricing: It is termed as the cost which is charged by the one department of the company…

Q: What is the difference between a Put option and a Call option? Explain. Provide examples.

A: Option is a derivative instrument which gives a choice to its buyer to buy or sell the underlying…

Q: Briefly explain Option Distinguish between Call option and a put option

A: Options are financial instruments whose value is based on underlying securities. An option contract…

Q: Which of the following is true about rates?

A: Total Rate of Return: The total rate is the real rate of return made on an investment over a period…

Q: Explain the issues involved in setting the bid price.

A: Bid price: The price that is offered for a commodity, service, and product is called bid price. It…

Q: Define the following terms, using graphs or equations to illustrate youranswers wherever feasible:…

A: APT                                                                              It is a model based…

Q: What is margin call?

A: The margin is defined as the money required from the traders for futures exchanges.  It is to…

Q: Define the term Fair Value Hierarchy.

A: Fair value: A value which is determined based on the market situation, business demand, and the…

Q: Sellers supply can be represented by-

A: Answer

Q: Define tender offer

A: Tender: A tender is an invite to bid for a scheme or take an official proposal like a takeover bid.

Q: Explain Pass-Through Rates, Yields, and Servicing Fee?

A: Pass-through rateA rate of interest being paid to the investors on the securitized asset after…

Q: What is offer price?

A: Bid price is the maximum price which the buyer is willing to pay to purchase. In other words, it…

Q: Briefly describe the fair value hierarchy.

A: Fair value: A value which is determined based on the market situation, business demand, and the…

Q: What is a transaction price?

A: Transaction price: It is the price of a service or a good which is expressed relative to the similar…

Q: Determine the theoretical ex-rights price?

A: The determination of the theoretical ex-rights price is generally done when stocks are issued and…

Q: Define ask quote (or ask price)

A: The recent price of stock or security at which stock or security is purchased and sold in the stock…

Q: Define target payout ratio

A: SOLUTION:- A target payout ratio is a degree of the proportion of a company's profits it would want…

Q: Explain put option

A: Introduction: This question is related to the concept of financial derivatives. Derivative…

Q: Define bid-ask spread

A: Introduction: The concept of bid-ask spread is related to options trading strategies. Option is a…

Q: impact the price of MYR?

A: MYR: MYR refers to the Malaysian Ringgit. It is the currency used in Malaysia. The value of 1 MYR is…

Q: What is the proposal’s internal rate ofreturn?

A: The internal rate of return is a metric used in financial analysis to estimate the profitability of…

Q: Define purchase option.

A:

Q: What is the bid-ask spread?

A: Banks maintain the stock of the currencies in which they trade. Acting as brokers, they earn a…

Q: What is the difference between a competitive bid and a negotiateddeal?

A: Negotiated deal: A negotiated bid contains only one general contractor who works in the best…

Q: Describe the statement Cost breakdown of lump -sum Bids?

A: Statement of cost breakdown is prepared to determine the individual elements that include the total…

Q: Define the Make-or-Buy Decision?

A: A make or buy decision is to choose whether to manufacture the produce in-house or purchase it from…

Q: Create a chart reflecting the convention payback period?

A: The chart is presented below:

Q: Define bid quote (or bid price)

A: The recent price of stock or security at which stock or security is purchased and sold in the stock…

Q: Define Arbitrage Pricing Theory (APT)

A: Arbitrage is the method of making profit from the temporary change in the cost of shares by buying…

Q: What is frequency regarding the make or buy decision?

A: Make or Buy: Make or Buy decision are normal condition arises in front of management due to…

Q: Define signaling hypothesis (dividends)

A: Introduction: This question is based on the concept of dividend theories in capital structure is…

Q: Differentiate and elaborate bid rate and offer rate.

A: Following is the answer to the question.

Q: Explain The Auction Process?

A: An auction is the place or thing where potential buyers and seller gather to publicly bid for the…

Q: Briefly explain Purchasing Power Parity?

A: Purchasing Power Parity (PPP) is a theory of exchange rate determination. Purchasing power parity is…

Q: Explain the importance of the excess-capacity issue in setting a competitive bid price.

A:

Q: Define put option

A: An Option is an contract sold by one party to another, that gives the buyer  the right, but not the…

Q: What should the transfer price be and why?

A: Given that: Transfer price as proposed by Top Division = $256 Price that is charge to outside…

Q: Define Premium.

A: Book value per share: This is a financial ratio which measures the value of shareholders’ equity…

Q: Calculate the value of a call option.

A: Call Option: A call option provides the buyer the right to exercise the option and benefit from the…