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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Distinguish between the terms open interest and trading volume. Problem 2.3. Suppose that you 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
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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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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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tistisSolution: Exercise 1 1. What is the difference between a long forward position and a short forward position? Ans: When the enters into a long forward contract‚ he/she is agreeing to buy the underlying asset for a certain price at a certain time in future. When the enters into a short forward contract‚ he/she is agreeing to sell the underlying asset for a certain price at a certain time in future. 2. Explain carefully the difference between hedging‚ speculation‚ and arbitrage. Ans:
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types of option contract‚ whether in exercising ability or difference in values ‚ And two types will be discussing in this presentation. Firstly‚ the American style of option contract‚ gives you the flexibility in using it and doing the transaction at any point of time up to the expiration day. Secondly‚ the European style of option contract‚ allows the investor to use the option only during the expiration day. And what really important is that all the options gives the investor the option but not
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Kirat Hundle 1. What is the difference between an element and a compound? An element is an isotope made of the number of neutrons it has. A compound is a substance made of two or more different elements (a mixture). 2. What is the periodic table? A periodic table is where the chemical elements are organized based on their atomic number (number of protons in the nucleus)‚ electron arrangement‚ and chemical properties. 3. Give two examples of each of the four major mineral groups (silicates‚ carbonates
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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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1. What is the difference between a. and a. List the four types of senior living communities that exist in the United States and in 2-4 sentences describe the typical characteristics of each. Continuing Care Retirement Communities (CCRCs): These communities offer a variety of care‚ ranging from independent living to skilled nursing services‚ with various contract and fee options. Residents typically sign a residency agreement that guarantees access to different levels of care as their needs change
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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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