You are a portfolio manager, currently managing $100 million worth asset including stock and bonds. You are expecting that some your clients will withdraw their contributions and you are also afraid that both share price and bond price may slide what sort of derivative security that you may consider to hedger risk and why? Why do we say we take long or short position in the derivative contract?

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A: Increase in Net income= Increase in Sales - Increase in costs= 6450 - 3000/5000*6450= 2580

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A: Here, McdWendyEquity Beta (Levered)0.90.7Debt Equity Ratio0.60.45Risk Free Rate3%Market Risk…

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Q: What amount can she deduct as an adjustment to her income on her Form 1040?

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Q: One can use Black-Scholes model to price any financial derivatives. true or false

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A: Present value is the equivalent value today based on the time and interest rate of the future money.

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A: r=11%

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A: Weight of debt shows how much is percentage of debt in over all capital structure of the company.

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Q: What is the Delta of this option

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A: The Capital Asset Pricing Model (CAPM) refers to the model which tells us how the financial markets…

Q: Exercise 13.3 P416-445 a. Calculate the price of a firm with a plowback ratio of .60 if its ROE is…

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Q: Ten annual returns are listed in the following table: (Click on the following icon in order to copy…

A: The arithmetic average return represents the average profit or loss on an investment over time,…

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Q: QUESTION 1 Currently, $1 will buy C$1.2103 while $1.2762 will buy €1. What is the exchange rate…

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A: Leasing Costs Calculation:Annual Lease Cost Calculation:Annual lease cost = $1,760,000Lease term = 5…

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A: Net Cash outflow for new Machine is that amount which is paid by the investor at initial level of…

Q: You can afford a $1400 per month mortgage payment. You've found a 30 year loan at 8% interest. a)…

A: Monthly payment =$1400Period of the loan = 30 yearsInterest rate = 8% per annum