Financial Risk Management‚ FIN3FRM Semester 2‚ 2012 Assignment 1 Q.1 An investor enters into a short forward contract to sell 100‚000 British pounds for U.S. dollars at an exchange rate of 1.9000 U.S. dollars per pound. How much does the investor gain or lose if the exchange rate at the end of the contract is (a) 1.8900 and (b) 1.9200? (2 points) Solutions: a) The investor as part of obligation for selling pounds‚ because of his obligation to
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To what extent does a currency forward contract need to play a formal role in multinational companies? A globalisation has risen over the last 20 years. Because of this factor‚ international markets have increased rapidly‚ therefore a large number of companies have been particularly interested in global operatings‚ such as‚ export trade‚ import trade‚ overseas sales (Moosa‚ 2003). A subsequent significant trouble looming large for
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enter into a short futures contract to sell July silver for $17.20 per ounce. The size of the contract is 5‚000 ounces. The initial margin is $4‚000‚ and the maintenance margin is $3‚000. What change in the futures price will lead to a margin call? What happens if you do not meet the margin call? Problem 5.2. What is the difference between the forward price and the value of a forward contract? Problem 5.3. Suppose that you enter into a six-month forward contract on a non-dividend-paying stock
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What is the Philips Curve? Explain why critics believe the relationship no longer holds. Different macroeconomic policies can be implemented in order to achieve government’s main objectives of full employment and stable economy through low inflation. Philips Curve can be use as a tool to explain the trade-off between these two objectives. This essay will first explain the Philips Curve and its relation to inflation and unemployment. Then‚ the breakdown of Philips Curve will be analysed
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Distinguish between futures and forward contract Futures contract A futures contract is a contractual agreement‚ generally made on the trading floor of a futures exchange‚ to buy or sell a particular commodity or financial instrument at a pre-determined price in the future. Futures contracts feature the quality and quantity of the underlying asset‚ they are standardized to facilitate trading on a futures exchange. Some futures contracts may call for physical delivery of the asset‚ while others
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Uses of Ser General Ser Rule Ser is used to classify and identify permanent or lasting attributes. If the general rule isn´t specific enough for you‚ think of the acronym DOCTOR‚ which stands for Description‚ Occupation‚ Characteristic‚ Time‚ Origin‚ and Relationship. 1. Description For description‚ think of what you would say if someone asked you "What´s he like?" These are the essential qualities that define a person and probably won´t change. They can be a name or a physical description.
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What is Contract? Discuss Essentials of Contact. According to Section 2 (h) of the Indian Contact Act‚ 1872‚ "A contract is “an agreement enforceable by law”. A contract therefore‚ is an agreement the object of which is to create a legal obligation i.e.‚ a duty enforceable by law. From the above definition‚ we find that a contract essentially consists of two elements: (1) An agreement and (2) Legal obligation i.e.‚ a duty enforceable by law. As per section 2 (e) "Every promise and every set of
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water (2) 12 grams of KClO3 in 200 grams of water (4) 30 grams of NaCl in 200 grams of water Answer--> Choice 1 8/02 One hundred grams of water is saturated with NH4Cl at 50oC. According to Table G‚ if the temperature is lowered to 10oC‚ what is the total amount of NH4Cl that will precipitate? (1) 5.0 g (2) 17 g (3) 30. g (4) 50. g Answer--> Choice 3; 52g-32g=30g 1/03 1 Solubility data for four different salts in water at 60oC are shown in the table below.
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$460 Gain Problem 2 5 Points On June 30‚ 2009‚ String Corporation incurred a $220‚000 net loss from disposal of a business component. Also‚ on June 30‚ 2009‚ String paid $60‚000 for property taxes assessed for the calendar year 2009. What amount of the preceding items should be included in the determination of String’s net income or loss for the six-month interim period ended June 30‚ 2009? Loss 220‚000 Property Tax 30‚000 Problem 3 15 Points On January
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to visit‚ and the downtown park with beautiful architecture and decoration you can admire. There is not too much you can do in davenport. As you can see‚ there is a great difference between these two cities. It is best to choose a city according to what you want to do. If you like to be active during the day‚ survive traffic and stress‚ go shopping and have fun at clubs or bars; Indianapolis is the place to be. If you want to have a calm day‚ hang out with friends‚ catch up on things‚ or use your
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