Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Financial Accounting Expert

1.) Companies manage risk in many ways. Which of the following is NOT one of them?

A. Use derivative contracts to reduce risk

B. Transfer the ways.

C. Transfer the risk to an insurance company

D. Minimize the magnitude of loss associated with adverse event

E. none of the above

 

2.) Two companies are evaluating a possible swap. Company A can issue floating-rate debt at LIBOR + 1%, and it can issue fixed rate debt at 9%. Company B can issue floating-rate debt at LIBOR + 1.5%, and it can issue fixed-rate debt at 9.4%. If A issues floating-rate debt and B issues fixed-rate debt, and then they engage in following swap: A will make a fixed 7.95% payment to B, and B will make a floating-rate payment equal to LIBOR to A. Which of the subsequent statements is right?

A. The swap is advantageous to A, however not to B

B. The swap is not advantageous to either A or B

C. The swap is advantageous to B, however not to A

D. The swap is advantageous to both A and B

E. none of the above

 

3.) "The June Treasury bond futures contract has a quoted price of 102'12. Are current market interest rates lower or higher than the standardized rate on a futures contract?

A. lower, because the contract is selling at a premium

B. higher, because the contract is selling at a premium

C. higher, because the contract is selling at a discount

D. more information is required to answer this problem

E. None of the above answers is correct

 

4.) The June Treasury bond futures contract has a quoted price of 102'12. What is current value of one contract in dollars?

A. 102,375

B. 102,120

C. 90,563

D. 90,180

E. none of the above

 

5.) The June Treasury bond futures contract has a quoted price of 102'12. What is the implied yearly interest rate?

A. 3.05%

B. 5.85%

C. 2.90%

D. 5.80%

E. none of the above

 

6.) The December Treasury bond futures contract has a quoted price of 95'18 and the implied interest rate is 3.2% (semiannual). If annual interest rates go up by 1.00 percentage point, what is the value of one contract?

A. $76,939

B. $ 69,591

C. $95,523

D. $85,504

E. none of the above

 

7.) Six months ago, a December Treasure bond futures contract had a quoted price of 95'16. Now, the quoted price is 99'4. What is gain or loss on contract?

A. Loss of $3625

B. Gain of $3625

C. Loss, but cannot determine amount

D. Gain, but cannot determine amount

E. none of the above

 

8.) Which of the following are ways risk management can be used to increase the value of a firm?

A. risk management will change the capital structure of the company

B. risk management will allow managers to defer income

C. risk management will not affect taxes.

D. all of the above

E. none of the above

 

9.) Two basic types of hedges involving the futures markets are long hedges and short hedges. Which of the subsequent is right?

A. both long and short hedges involve buying futures contracts

B. a short hedge involves buying futures contracts

C. both long and short hedges involve selling futures contracts

D. a long hedge involves buying futures contracts

E. none of the above

 

10.) Which of the following is correct?

A. A speculator who buys or sells futures contracts has an offsetting position in the spot market

B. A speculator who sells futures contracts believes the price will increase

C. A speculator who sells futures contracts believes the price will decrease

D. A speculator who buys or sells futures contracts takes little risk

E. none of the above

Financial Accounting, Accounting

  • Category:- Financial Accounting
  • Reference No.:- M93348

Have any Question? 


Related Questions in Financial Accounting

Problem q 1on july 1 2014 linked up inc acquired a new

Problem: Q 1 On July 1, 2014 Linked Up Inc. acquired a new machine at a cost of $15,000 with a residual value of $3,000. The estimated useful life is 5 years and 100,000 units. For the year ending June 30, 2015 the machi ...

Accounting and financial management assignmentthis

Accounting and Financial Management Assignment This Assignment is designed to give you an opportunity: demonstrate applied knowledge of the accounting regulatory environment. apply financial statement analysis. apply and ...

Mid-atlantic container corporation1assess the current

Mid-Atlantic Container Corporation 1) Assess the current financial health and recent financial performance of the company. What strengths and/or weaknesses would you highlight to Sarah Conner? 2) What are the key driver ...

Assignmentthe kroger company reported the following data in

Assignment The Kroger Company reported the following data in its annual report (in millions).   January 31, 2015 February 1, 2014 February 2, 2013 Net sales $108,465 $98,375 $96,619 Cost of sales (using LIFO) 85,512 78,1 ...

Assessment case study of financial analysis and operating

Assessment: Case Study of Financial Analysis and Operating Ratios In this assessment you will use the income statement and balance sheet information identified below and evaluate the firm's financial condition based on t ...

Assignment1 benzton inchad sales of 1200000 during 2015

Assignment 1. Benzton Inc.had sales of $1,200,000 during 2015. Twenty-five percent of these were cash sales. In addition to the 2015 cash sales, $569,400 of the 2015 credit sales were collected during the year. $30,000 o ...

Assignmentdue to erratic sales of its sole product-a

Assignment Due to erratic sales of its sole product-a high-capacity battery for laptop computers-PEM, Inc., has been experiencing difficulty for some time. The company's contribution format income statement for the most ...

Describe a painful disposal situation that you have

Describe a painful disposal situation that you have encountered. What was the result? Would you do it differently if you had it to do over again? How can marketers use the consumer’s reluctance to part with favorite prod ...

Assignmentscenario for assignments 1-5for assignments 1-5

Assignment Scenario for Assignments 1-5 For Assignments 1-5, you are the new budgeting and finance administrator for your local government agency. Your first responsibility is to become familiar with the agency, the budg ...

Describe the steps in the exporting process and each of the

Describe the steps in the exporting process and each of the instruments that facilitate exporting. What are export management companies and what are export trading companies? What purposes do they serve and in what way a ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen