Which derivative does not reduce financial risk? a. options b. swaps c. futures d.forwards e. answer not given

Q: Too much money in an economy with too little goods and services creates:

A: High amount of money in the market with little goods or services will create an imbalance in the…

Q: Beagle Beauties engages in the development, manufacture, and sale of a line of cosmetics designed to…

A: The Price Multiple approach can be used to calculate the expected price of a share by estimating the…

Q: 9. Taxes and WACC Caddie Manufacturing has a target debt-equity ratio of .45. Its cost of equity is…

A: WACC used to represent the cost of capital of the company, where each and every category of the…

Q: MORGAN Merchandising is preparing its Sales Budget for the 3rd Quarter of 2020 based on a budgeted…

A: The sales budget: The sales budget gives an estimate of the number of units expected to be sold and…

Q: Here's an example of how breakpoint discounts on sales commissions for mutual fund investors work:…

A: NAV refers to net asset value. For a mutual fund its NAV = total assets - total liabilities

Q: |A stock's expected return has the following distribution: Demand for the product Probability Rate…

A: Demand for the product Probability Return of Return(ROR) Weak 10.00% 50.00% Below Average 20.00%…

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Q: the dividend discount model what is the value of the Jasmine limited share if the firm's cost of…

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Q: Given the information below for HooYah! Corporation, compute the expected share price at the end of…

A: Expected share price using price ratio analysis.

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A: A project or asset is to be capitalized at the present value. To calculate the capitalized value of…

Q: Find the modified BI C gatio for the following project. Use PW formulation- Also test the…

A: Modified B/C ratio stands for modified benefit cost ratio. It is calculated by subtracting the…

Q: A brand new house and lot costs Php 5M if paid in cash. On the installment plan, the buyer should…

A: House price = 5 miilion Downpayment = 5 million * 20% = 1 million Loan taken = 5 Million - 1 million…

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A: Due to time value of money, the purchasing power of money changes over time. That is the value of a…

Q: What is the cash conversion cycle of JFC? Note: don’t use excel and show your solution.

A: Here, Accounts Receivables is 7,621 Inventories is 5,972 Accounts Payable is 2,455 Cost of Goods…

Q: 1. If you wished to calculate a stock's 5% daily VAR using historical data. If you had 2000 data…

A: The Value at Risk: The Value at Risk (VaR) is a metric that is used to quantify the worst potential…

Q: Finance A company says "yes" to a number of orders with a coverage ratio of 30%. They currently have…

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Q: Similar to a stock option, a warrant is a contract between two parties that gives one the right to…

A: When a warrant is exercised by the holder, he can get shares in the issuing party's company. The…

Q: 1- Find the internal rate using the method of Internal Rate of Return (IRR) if i = 15%, for the…

A: IRR is the rate at which Present value of cash Inflows is equal to Present Value of cash Outflows…

Q: Good Credit is between O 680-700 O 620-800 O 650-700

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Q: Aretha ran up $38,800 on her credit card, which charges 13.95%. If she decides to cut up her card…

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Q: How much money be invested today in order to withdraw P1500 per year at the end of each year for 8…

A: Annual withdrawal (P) = P1500 Interest rate (r) = 8% Number of withdrawals (n) = 8

Q: Calculate the value of a 6 year 2% coupon bond with semiannual payments, 1000 par.  Expected return…

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Q: Arbitration is a judicial process in which parties submit grievance to an arbitrator who makes a…

A: Arbitration is an agreement in which parties agrees to resolve the dispute by a settlement.

Q: A firm earns $895 million in profits and pays $626 million in dividends for the year. The firm has…

A: Preferred stocks are those stocks that do not carry voting rights but pays a set schedule of…

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Q: Harper Corporation has the following information about the purchase of a new piece of equipment:…

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Q: what is the expected return on a portfolio that is invested 70 in k and 30 given the following…

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Q: The activity date, company, and amount for a credit card bill are shown below. The due date of the…

A: Here, Interest rate = 1.7% per month To Find: Finance charge =?

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A: Answer-    Working Note : Greiner Company Production Budget For the First Quarter of the…

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Q: borrowed $69,100 to purchase a home the bank offered her an APR of 4.12% for a term length of 20

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Q: Capital Asset Pricing Model  a) describe the model b) what are the assumptions in the model c)…

A: a) CAPM Model CAPM model ideally portrays the relationship between systematic risk and the expected…

Q: What is the expected rate of return for the Philippine Stock Index Portfolio? STOCK MARKET VALUE…

A: Expected Return: The expected return is the minimum required rate of return which an investor…

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A: Bond amortization refers to a schedule which is prepared to shows the coupon payments, amount paid…

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A: Benefit cost ratio is an important tool to assess the financial feasibility of projects. Using this…

Q: Yor Inc. most recently sold 200,000 units at P12.00 each; its variable operating costs are P9.00 per…

A: Note: This post contains several questions. The first three have been solved below.

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A: Here, n1-year par rate = 4% n2-year par rate = 5.2% n3-year par rate = 6.4%

Q: If these projects were independent, which project(s) would be accepted? Why? If these projects were…

A: We use different capital budgeting tools to determine the financial feasibility of projects that are…

Q: In mid-2015, Microsoft Corporation had a market capitalization of $340 billion, $35 billion in debt,…

A: The beta of a company indicates the sensitivity of the stock prices or prices of assets to the…

Q: 1. Let's assume that a loan of $100,000 with an annual interest rate of 6% over 30 years pays…

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A: The maximum price that can be paid for a property is the present value of all net income that will…

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A: Given, The cost of machine is $6,000,000 Installation charges $10,000

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A: Rule of 72 is a rule of thumb used in finance that helps in estimating the number of years that it…

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A: Standard deviation is a measure of unsystematic risk which shows the variability of returns of a…

Exchange Rate Risk

It is the possibility that the value of a currency will fluctuate in the future. In the wake of globalization, business establishments have increasingly ventured into international markets. The volume of international trade has prospered excellently in the near past and is expected to be more affluent in the future. The use of exchange-traded derivative financial instruments has been multi-folded to provide for the requirements of various MNCs and offshore potential investors. Most banks and financial institutions have helped integrate the global economies. Our Government has introduced some bold and extreme measures to fulfil the purpose behind the fiscal, industrial, and monetary policies. The enactment of GST is a huge step towards streamlining the taxation system of the country. Owing to Covid-19, this aspect of corporate risk management has become critical.