investors
Q: From the information provided below can you please complete the given table using the FIFI method of…
A: Under FIFO Method, units which came in first will be issued first and the inventory will be out of…
Q: 1.2 Study the information provided below and calculate the hourly recovery tariff per hour…
A: The hourly recovery tariff rate can be calculated by dividing the total salary payable by the total…
Q: gain or loss i
A: Gain or loss refers to the amount that a person earns from the sale of an item more than the…
Q: Use the information provided below to calculate the following manufacturing variances for March…
A: The actual hours worked is the actual time taken to produce the unit. The standard hours allowed is…
Q: 9 Asset-liability management (ALM) is the process of planning, organizing, and controlling asset and…
A: Assets- Assets are required for the company's survival. These assets are recorded in the balance…
Q: On December 1, Jasmin Ernst organized Ernst Consulting. On December 3, the owner contributed $84,310…
A: Profit & Loss A/c Particulars Amount Particulars Amount To Rent expense $3,910 By…
Q: On June 30, 2021, Casio Sony Company sold a property carried in inventory at a cost of P1,894,200…
A:
Q: 1.Kevone is single and works for a local tech firm. He earned $87,000 last year in taxable wages,…
A: The adjusted gross income is the net earning of the taxpayer after deductions and exemptions. The…
Q: audit procedures
A: In the given question, during the audit of a manufacturing company the auditor noticed certain…
Q: Calculate contribution margin and prepare an incremental analysis concerning retaining or dropping…
A: 1. Contribution margin = it is the margin that contributes towards fixed cost and profit. It is…
Q: Ridgeway Ltd is a company that has manufactured steel shelving systems for sale to retail customers.…
A: Cash flow is the statement which shows the flow of cash in the company. Cash inflows are treated as…
Q: 1. Business Organization Green Corporation (GC) is stock corporation engaged in the events…
A: Answer:- l Option recommended to BOD:- To sell additional preferred shares in the stock market.…
Q: Kinkaid Company was incorporated at the beginning of this year and had a number of transactions. The…
A: The balance sheet represents the financial position of the business with assets, liabilities and…
Q: Current Quick Selected Ratios for RR RR 1.75 0.92 TL/Assets Turnover of Cash DSO(365-day year) Inv.…
A: According to the given question, we are required to explain the inaccuracy under the RR column.…
Q: Capital account is essentially a standard equity account with a standard credit balance from an…
A: In worldwide monetarism, the capital account is the component of the balance of payments that…
Q: to sell 800 alarm systems each month of 2022 at R4 000 each. The cost price of each The inventory…
A: Economic order quantity - EOQ = square root of 2 ×(annual demand × ordering cost) / annual…
Q: Use the information provided below to prepare the following for January and February 2023 as per…
A: Cash Budget- A cash budget analyses the flow of cash in a company over the long or short term. So a…
Q: Indicate where each item would appear on a statement of cash flows using the indirect method by…
A: A cash flow statement indicates cash inflow and cash outflow information of a particular time…
Q: Maples Corporation is a Canadian subsidiary of a U.S. parent company. Shown below is the company’s…
A: Maples Corporation is a Canadian subsidiary of a U.S. parent company. We must convert their income…
Q: 1.) Mccabe Corporation uses the weighted average Method in it's process Costing. The following data…
A: Equivalent units: Materials = 7,300 + (1,700 x 75%) = 7,300 + 1,275 = 8,575
Q: Currently, Grab Industrial makes 1,000 tyres every month. For sales to ordinary customers, the…
A: calculation of cost to make 2000 tyres are as follows
Q: 1.5 From the information provided below complete the table using the FIFO method of inventory…
A: Inventory valuation is the technique of recording the value of inventory at the time of receiving…
Q: A company uses the composite method to depreciate its equipment. The following totals are for all of…
A: Equipment purchased and used by the entity will undergo wear and tear over the period where…
Q: a) Prepare the adjusting entries on March 31, assuming that adjusting entries are made quarterly. b)…
A: The purpose of the adjusting entries is to provide for the unearned revenues, outstanding expenses,…
Q: 1. Business Organization Green Corporation (GC) is stock corporation engaged in the events…
A: Answer:- I Option shall be recommended to the board of director:- b. To sell additional preferred…
Q: 4. Listed below are various types of accounting changes and errors. a) Nathalie Cole Inc. acquired…
A: While preparing the books of accounts there always remains a possibility of errors and omissions.…
Q: Ines Company consigned twenty five (25) calculators, with cost of P800 each, to Hola Company for a…
A: Under consignment sales one party gives their goods to another party for selling. The one who gives…
Q: Kiera sells Parchment, Inc. stock (adjusted basis $29,000) to Phillip, her brother, for its fair…
A: Answer (a) Kiera's(Seller's) Recognised Gain/Loss Particulars Amount Amount realised $…
Q: Equipment: Invoice price of machine Less: Discount Net purchase price Transportation Assembly…
A: Introduction: The total cost formula is used to total the variable and fixed costs of a batch. This…
Q: Cartier Corporation currently sells its products for $50 per unit. The company’s variable costs are…
A: The contribution margin is the excess of revenue over variable cost. It indicates the amount…
Q: A sporting goods store purchased $9,800 worth of ski boots in October. The store had $4,200 of ski…
A: Answer:- Cost of goods sold meaning:- The entire amount that a company spent as a cost directly…
Q: A floating rate mortgage loan is made for $120,000 for a 30-year period at an initial rate of 12…
A: Loan: When you get a loan, the repayment process will be spread out over a longer period of time and…
Q: implied 1-year forward rate 1 year from today
A: Given Info: R1=7% R2=8% We have to calculate Implied 1 year forward rate 1 year from today, it can…
Q: The Compressor Division and the Fabrication Division of Plash Company, which exclusively produces…
A: Calculation assuming 1,000 compressors are built and transferred to the Fabrication Division at a…
Q: Study the information provided below and calculate the following: 3.1 Manufacturing costs per unit…
A: Under ABC Costing System, Overhead Costs are allocated to the products based on the relevant cost…
Q: The owners are desirous of comparing serval financial transactions and possible outcomes to assist…
A: In the context of the given question, we are required to prepare the statement of stockholders'…
Q: Study the information given below and answer each of the following questions independently:…
A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: The comparative financial statements of Marshall Inc. are as follows. The market price of Marshall…
A: Profits retained is an important accounting principle. The term refers to a company's historical…
Q: Ecology Co. sells a biodegradable product called Dissol and has predicted the following sales for…
A: Purchase units: The purchase units are determined by preparing a purchase budget. This can be used…
Q: Compute the amount of money to be set aside today to ensure a future value of $4,400 in one year if…
A: Present Value of Money to be set aside to receive amount after a specified period (say t) and at a…
Q: Using the information from question 1, calculate the current ratio for 2018 and 2019 respectively:…
A: Current ratio for 2018= Current AssetsCurrent Liabilities= $101,600$33,650=3.02
Q: A machine with a 4-year estimated useful life and an estimated 15% salvage value was acquired on…
A: Depreciation was used to record the value of various machineries after its wear & tear over the…
Q: Hannah has been selling laptops for $300 each that had a cost of $252. By year end the net…
A: Introduction:- The following inventory methods used as follows under:- Specific identification…
Q: Which of the following transactions take effect on net working capital? Restaurant Barron's…
A: Net working capital = Current assets - current liabilities
Q: 1. Cite specific examples of risk avoidance, Reduction, Transfer and Retention? 2. What is the…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: Use the information provided below to prepare the following for January and February 2023: 4.1…
A: Debtors Collection Schedule indicates average time taken to collect debt from debtor.
Q: Taylor Corporation reports inventory and cost of goods sold based on calculations from a LIFO…
A: Businesses that employ the LIFO Inventory Costing Method sell their old inventory stock through the…
Q: im and Joan Miller are borrowing $120,000 at 6.5% per annum compounded monthly for 30 years to…
A: Comment- Multiple Questions Asked Compound Interest - The interest on interest is known as compound…
Q: A company acquired equipment for $150,000 by signing a $150,000 note payable. The $150,000 is…
A: Introduction: Financing activities include deals involving long-term liabilities, owner ’s equity,…
Q: Montana Mining Company pays $3,478,510 for an ore deposit containing 1,560,000 tons. The company…
A: Depreciation is considered as an expense charge on the value of the Asset. It can be calculated by…
Question 1
We understand standard deviation of returns as a measure of risk and rational investors would like to minimize risk. Notwithstanding this, you may have read that as the standard deviation of returns of the underlying asset increases the value of an option rises. If standard deviation is a measure of risk and investors do not particularly like it, why does it lead to an increase in an option's value?
Question 2
Assume that you have some shares of stock in ABC Inc. Why do we say that if you also purchase a put option on the same stock, the price paid to buy the put option is like paying an insurance premium?
Step by step
Solved in 2 steps
- A) Assume that you have some shares of stock in ABC Inc. Why do we say that if you also purchase a put option on the same stock, the price paid to buy the put option is like paying an insurance premium? B) We understand standard deviation of returns as a measure of risk and rational investors would like to minimize risk. Notwithstanding this, you may have read that as the standard deviation of returns of the underlying asset increases the value of an option rises. If standard deviation is a measure of risk and investors do not particularly like it, why does it lead to an increase in an option's value?Q1 .In an investment market , understanding the concept of undervalued and overvalued stock is very important . hence , a prudent investor must have good knowledge about beta, market rate of return and risk free rate of return a) Being an investor , critically analyse the conditions of undervalud and overvalued stockProblem 4d: State whether the following statements are true or false. In each case, provide a brief explanation. d. In a binomial world, if a stock is more likely to go up in price than to go down, an increase in volatility would increase the price of a call option and reduce the price of a put option. Note that a static position is a position that is chosen initially and not rebalanced through time.
- Q1 .In an investment market , understanding the concept of undervalued and overvalued stock is very important . hence , a prudent investor must have good knowledge about beta, market rate of return and risk free rate of return a) Being an investor , critically analyse the conditions of undervalud and overvalued stock b) Give a graphical example to present the positioning of - systematic risk - risk free rate of return - mareket rate of return - risk premiumExplain why the risk premium of a stock does not depend on its diversifiable risk. Question content area bottom Part 1 (Select the best choice below.) A. Investors don't care about diversifiable risk and so don't hold any. B. Investors care about diversifiable risk, but hedge their positions so they don't demand a risk premium. C. Although investors must hold diversifiable risk, they don't care about it, so there is no risk premium. D. Investors can remove diversifiable risk from their portfolio by diversifying. They therefore do not demand a risk premium for it.Q1 .In an investment market , understanding the concept of undervalued and overvalued stock is very important . hence , a prudent investor must have good knowledge about beta, market rate of return and risk free rate of return b) Give a graphical example to present the positioning of- systematic risk- risk free rate of return - mareket rate of return- risk premium
- 1. Clearly explain why some risks are systematic and others non-systematic. How is it possible for an investor to control the level of non-systematic risk in a portfolio but not the level of systematic risk? 2. John is considering an investment in these two stocks, Stock A and Stock B, and has come to you for advice whether to buy and/or avoid any of the stocks. Stock A has a beta of 1.15 and an expected return of 14%. Stock B has a beta of 0.7 and an expected return of 9%. If the risk free rate is 5% and the market return is 12%, what will be your best recommendation to John? 3. What advice would you give to a client who is confused about the concept that in a well-functioning market all assets will have the same reward to risk ratio? Your answer should cover the following issues: i.How would we expect that all assets have the same reward to risk ratio? ii. How can an investor increase his/her returns if this holds true.1. Which statement is not true regarding the market portfolio? a.It lies on the efficient frontier.b.All securities in the market portfolio are held in proportion to their market values.c.It is the tangency point between the capital market line and the indifference curve.d.All of the options are true. 2. Which of the following are used by fundamental analysts to determine proper stock prices? I.TrendlinesII.EarningsIII.Dividend prospectsIV.Expectations of future interest ratesV.Resistance levels a.I, IV, and Vb.I, II, and IIIc.II, III, and IVd.All of the items are used by fundamental analysts.We understand standard deviation of returns as a measure of risk and rational investors would like to minimize risk. Notwithstanding this, you may have read that as the standard deviation of returns of the underlying asset increases the value of an option rises. If standard deviation is a measure of risk and investors do not particularly like it, why does it lead to an increase in an option's value? (40-60 words)
- 1.) According to Jacques’s recommendation, assuming that the market is in equilibrium, how much will the portfolio’s required return change? _______ 2.) Suppose, based on the earnings consensus of stock analysts, Jacques expects a return of 9.57% from the portfolio with the new weights. Does he think that the revised portfolio, based on the changes he recommended, is undervalued, overvalued, or fairly valued? _______ 3.) Suppose instead of replacing Atteric Inc.’s stock with Baque Co.’s stock, Jacques considers replacing Atteric Inc.’s stock with the equal dollar allocation to shares of Company X’s stock that has a higher beta than Atteric Inc.. If everything else remains constant, the portfolio’s risk would _______Question #1. Portfolio theory tends to define risky investments in terms of just two factors: expectedreturns and variance (or standard deviation) of those expected returns. What assumptions need to be made about investors and the expected investment returns (one assumption in each case) to justify this ‘two-factor’ approach? Are these assumptions justified in real life? Question #2. ‘The expected return from a portfolio of securities is the average of the expected returns of the individual securities that make up the portfolio, weighted by the value of the securities in the portfolio.’ ‘The expected standard deviation of returns from a portfolio of securities is the average of the standard deviations of returns of the individual securities that make up the portfolio, weighted by the value of the securities in the portfolio.’ Are these statements correct? Question #3. What can be said about the portfolio that is represented by any point along the efficientfrontier of risky investment…3) What is called the called the return on a stock beyond what would be predicted from market movements ? A)An abnormal return B) An economic return C) An irrational return D) None of the options are correct. E) All of the options are correct. Please justify your answer.
