Analyse the differences between foreign currency options and
futures and when either might be most appropriately used?
Answers
Foreign currency options and futures are both derivative financial instruments used for hedging and speculating in the foreign exchange market. However, there are key differences between the two:
Contract Structure: Futures contracts represent an obligation to buy or sell a specified currency at a predetermined price and future date. Options contracts, on the other hand, provide the holder with the right but not the obligation to buy or sell a specified currency at a predetermined price and future date.
Obligation: Futures contracts have an obligation to fulfill the contract at expiration. In contrast, options contracts provide the holder with the choice to exercise or let the contract expire.
Risk: With futures contracts, the buyer and seller are exposed to unlimited risk as they are required to fulfill the contract regardless of the underlying exchange rate movement. Options, however, limit the risk to the premium paid for the option contract.
Flexibility: Options provide more flexibility as they allow the holder to choose whether to exercise the option or not, depending on the prevailing exchange rate. Futures contracts have a fixed obligation to buy or sell the currency at the predetermined price.
Foreign Currency Options: Options are suitable when there is uncertainty about the direction of the exchange rate movement. They provide the flexibility to protect against unfavorable exchange rate movements while allowing for potential gains if the exchange rate moves favorably. Options are commonly used by businesses and investors to hedge currency exposure or speculate on exchange rate movements.
Foreign Currency Futures: Futures contracts are typically used when there is more certainty about the future exchange rate. They offer a straightforward way to hedge against currency risk by locking in the exchange rate at a specific future date. Futures contracts are commonly used by corporations engaged in international trade to protect against potential losses from adverse exchange rate movements.
Ultimately, the choice between options and futures depends on the specific risk management needs, market expectations, and preferences of the individual or organization.
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Related Questions
how can value added production benefit south african economy
Answers
The value added production can benefit South African economy because it helps to improve its product quality and led to increase GDP.
What is a value added production?This refers to any process that creates a product into a more valuable product. For instance, if a farmer can turn her products into an advance product and sell it at a higher price, he had achieved a value added production.
By creating or supporting a value-added production facilities is one way communities or societies are reinvesting in their agricultural roots and committing to stronger, local economies.
Hence, the value-added production essentially means those process that creates a product into a more valuable product.
In conclusion, the value added production can benefit South African economy because it helps to improve its product quality and led to increase GDP.
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the total cost curve gets steeper as output increases because of: group of answer choices decreasing returns to the variable input. decreases in overhead costs. increases in fixed cost. increasing returns to the variable input.
Answers
The correct answer is "decreasing returns to the variable input." The total cost curve represents the relationship between the total cost of production and the level of output.
As output increases, the total cost curve typically becomes steeper. This is primarily due to the concept of diminishing marginal returns or decreasing returns to the variable input. When a firm increases the quantity of a variable input (such as labor or raw materials) while keeping other inputs fixed, there comes a point where the marginal product of the variable input starts to decline. In other words, each additional unit of the variable input contributes less to the total output. As a result, the cost of producing each additional unit of output increases at a faster rate. This leads to the steeper slope of the total cost curve. The firm needs to invest more resources and incur higher costs to achieve the same level of output as it reaches the point of diminishing returns.
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Which of the following is NOT a basic statistic?
Mean
Area
Median
Mode
Answers
the answer is AREA (b) bcos all the other are general basic statists
Which of the following BEST illustrates the involvement of the U.S. government in the marketplace today?
O
A The government takes over an industry in order to control production.
O
B. The government requires manufacturers to issue warnings that come with new microwave ovens.
OC. The government hires new workers to help deliver government services to the public.
OD. The government encourages formation of consumer and business interest groups.
Answers
Answer:
B.
Explanation:
The answer is B. The government requires manufacturers to issue warnings that come with new microwave ovens.
What is supply and demand in simple terms?
Answers
Demand is the market's willingness to buy the item or service, whereas supply is the market's capacity to create the commodity or service. Supply and demand.
Supply is a fundamental economic concept that describes the overall quantity of a certain good or service that is made accessible to buyers. Demand and it are extremely tightly tied to one another. Prices of a given good or service decline as supply outpaces demand. Demand is the consumer's intention to buy a specific product or service. The desire for a certain item on the market is known as market demand. The entire demand for goods and services in the economy is known as aggregate demand. The price of an item or service is determined by how well supply and demand match.
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What does the Federal Reserve System do
Answers
Answer: It tries to maximize employment and minimize inflation.
Explanation:
refer to table 1. suppose the country is producing 30 units of consumer goods. what is the opportunity cost of producing an additional 10 units of consumer goods?
Answers
The opportunity cost of producing an additional 10 units of consumer goods is 6 units of Capital goods.
As per the data given:
The country is producing 30 units of consumer goods.
Here we have to determine the opportunity cost of producing an additional 10 units of consumer goods.
Capital goods Consumer goods
60 10
58 20
54 30
48 40
40 50
30 60
18 70
0 80
The opportunity cost of producing an additional 10 units of consumer good is 6 units of capital goods.
As resources are limited and they are utilized either in capital or consumer good.
When 20 units of consumer good produced than capital goods produced is 54 units where as when 30 units of consumer good produced than 48 units of capital good.
= 54 units - 48 units
= 6 units
It means 6 units has been foregone.
Option B is correct.
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Suppose the country is producing 30 units of consumer goods. what is the opportunity cost of producing an additional 10 units of consumer goods?
Capital goods Consumer goods
60 10
58 20
54 30
48 40
40 50
30 60
18 70
0 80
(a) 10 units of Capital goods.
(b) 6 units of Capital goods.
(c) 54 units of Capital goods.
(d) 48 units of Capital goods.
(e) None of these
If you are interviewed by more than one person, you should send a thank-you note to _____.
each person in the interview
each person you see in the building
the first person you are introduced to
the person who is obviously leading the interview
Answers
Answer:
option A is correct.
i.e.
each person in the interview.
Explanation:
Because thank-you letter provides a simple but effective way to express gratitude to all the individuals you met with.
Most cases of external bleeding from an extremity can be controlled by: A. elevating the injured extremity. B. packing the wound with gauze.
Answers
In the case of external bleeding from an extremity, most cases can be controlled by packing the wound with gauze.
The second option, elevating the injured extremity, can help control bleeding in certain situations but may not always be effective, especially in cases of severe bleeding or trauma.
What is external bleeding? External bleeding refers to bleeding that occurs outside of the body. This type of bleeding can be caused by injuries such as cuts, puncture wounds, or lacerations. When blood vessels are injured, blood begins to leak out and can cause significant loss of blood if not controlled quickly.
How can external bleeding be controlled? To control external bleeding, the following steps can be taken: Apply direct pressure: Use a sterile or clean cloth or gauze to apply firm pressure to the wound. This pressure will help to slow or stop the bleeding. Pack the wound: If the bleeding is severe, pack the wound with sterile gauze or a clean cloth. This pressure will help to slow or stop the bleeding even further.
Elevate the injured extremity: Elevating the injured extremity can help reduce blood flow to the area and slow the bleeding. Apply a tourniquet: If the bleeding cannot be controlled by other methods, a tourniquet may be applied. A tourniquet should be applied as a last resort and only when there is no other way to control the bleeding. A tourniquet is a tight band that is placed around the limb to reduce blood flow. In conclusion, most cases of external bleeding from an extremity can be controlled by packing the wound with gauze.
Elevation can help control bleeding in certain situations but may not always be effective, especially in cases of severe bleeding or trauma. Therefore, case of external bleeding from an extremity, most cases can be controlled by packing the wound with gauze.
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Tammy, a resident of Virginia, is considering purchasing a North Carolina bond that yields 4.6% before tax. She is in the 35% Federal marginal tax bracket and the 5% state marginal tax bracket. She is aware that the State of Virginia bonds of comparable risk are yielding 4.5%. However, the Virginia bonds are exempt from Virginia tax, but the North Carolina bond interest is taxable in Virginia. Which of the two options will provide the greater after-tax return to Tammy? Tammy can deduct any state taxes paid on her Federal income tax return.
Answers
Two-thirds of a number is two more than one-half of another number. The sum of the number is 129. Find the numbers.
Answers
Answer: 57 ; 72
Explanation:
Given information
2/3 of a number is 2 more than (1/2) of another number
Sum = 129
Set variables
Let x be the first number
Let y be the other number
Set system of equations
\(1)~\dfrac{2}{3} x=\dfrac{1}{2} y+2\)
\(2)~x + y=129\)
Eliminate fractions in the 1) equation
\(\dfrac{2}{3} x\times6=\dfrac{1}{2} y\times6+2\times6\)
\(4x=3y+12\)
Move x and y onto the same side
\(4x-3y=12\)
Current System
\(1)~4x-3y=12\)
\(2)~x + y=129\)
Multiply 3 on both sides in 2) equation
\(x\times3 + y\times3=129\times3\)
\(3x+3y=387\)
Current System
\(1)~4x-3y=12\)
\(2)~3x+3y=387\)
Add 1) equation and 2) equation together
\((4x - 3y)+(3x+3y)=(12)+(387)\)
Expand parenthesis and combine like terms
\(4x - 3y + 3x + 3y = 12 + 387\)
\(4x + 3x - 3y + 3y=399\)
\(7x=399\)
Divide 7 on both sides
\(7x\div7=399\div7\)
\(\Large\boxed{x=57}\)
Substitute the x value into one of the equations to find the y value
x + y = 129
(57) + y = 129
y = 129 - 57
\(\Large\boxed{y=72}\)
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The Johnsons are buying a house that costs $210,000 and can afford a 20% down payment. If the Johnsons want the lowest monthly payment, which loan option would you recommend? a. 30 year FHA, 3. 5% down at a fixed rate of 6. 25% b. 30 year fixed, 20% down at a fixed rate of 6% c. 30 year fixed, 10% down at a fixed rate of 6% d. 15 year fixed, 20% down at a fixed rate 5. 5%.
Answers
If the Johnsons want the lowest monthly payment, the recommended loan option is Option b.
Data and Calculations:Cost of house = $210,000
Down payment = 20% or $42,000 ($210,000 x 20%)
Loan = $168,000 ($210,000 - $42,000)
Monthly Payments:Option a. 30 year FHA, 3. 5% down at a fixed rate of 6. 25%:
Cost of house = $210,000
Down payment = 3.5% or $7,350 ($210,000 x 3.5%)
Loan = $202,650 ($210,000 - $7,350)
Result:
Monthly Payment = $1,247.75
Sum of all periodic payments = $449,190.33
Total Interest = $246,540.33
Option b. 30 year fixed, 20% down at a fixed rate of 6%
Cost of house = $210,000
Down payment = 20% or $42,000 ($210,000 x 20%)
Loan = $168,000 ($210,000 - $42,000)
Result:
Monthly Payment = $1,007.24
Sum of all periodic payments = $362,608.16
Total Interest = $194,608.16
Option c. 30 year fixed, 10% down at a fixed rate of 6%
Cost of house = $210,000
Down payment = 10% or $21,000 ($210,000 x 10%)
Loan = $189,000 ($210,000 - $21,000)
Result:
Monthly Payment = $1,133.15
Sum of all periodic payments = $407,934.18
Total Interest $= 218,934.18
Option d. 15 year fixed, 20% down at a fixed rate 5. 5%
Cost of house = $210,000
Down payment = 20% or $42,000 ($210,000 x 20%)
Loan = $168,000 ($210,000 - $42,000)
Result:
Monthly Payment = $1,372.70
Sum of all periodic payments = $247,086.04
Total Interest = $79,086.04
Thus, if the Johnsons want the lowest monthly payment, the recommended loan option is Option b with a monthly payment of $1,007.24.
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Johnson's should opt for a loan with interest rate of 6.25% ; period of 30 years and a down payment of 20% of the loan amount. So, the correct option that matches the query is B.
The calculation of the interest can be done by using the simple interest. Under Simple interest method, the loan is calculated only on the principal amount and not on the interest.
Housing Loans The calculation when the down payment of 20% is made upfront the calculation will be shown as $42000. So, the interest will be charged only on the remaining balance of $168,000. The calculation can be shown as below,\(\rm Amount= \dfrac{Principal\ x\ Rate\ of\ Interesr\ x\ Time}{100}\\ \\\\ \rm Amount= \dfrac{168000\ \rm x\ 6\ \rm x\ 360}{100}\\ \\ \)The interest to be paid each year will be calculated as under for a total number of 30 years.\(\rm Interest\ per\ Year= \dfrac{36288}{30}\)So total interest to be paid each year will be $1209.6 which is lower than all the other options available in the hands of Johnson's.Hence, the correct option is B that it would be beneficial for Johnson's to opt for 20% down payment at an interest rate of 6% and for a period of 30 years.
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What is a trend in business
Answers
Tammy’s home cost her $184,000. she lives in an area with a lively real estate market, and her home increases in value by 3.5% every year. if tammy sells her home after thirteen years, how much profit will she have made, to the nearest hundred dollars?
a. $8,500
b. $87,800
c. $83,700
d. $103,800 please select the best answer from the choices provided a b c d
Answers
If Tammy sell her house at the future value 13 years later, she will gain profit of $103,800 (D).
Future value is the value of acurrent asset based on an assume rate of growth in the future. Future value is crucial in deciding how much an investment made today will be worthy in the future.
Future value can help an investor to estimate his future profit from an investment he made in the current time. An investor will gain profit if the future value of his investment is higher than its present value.
Future value can be calculated based on the present value of an asset. Future value can be fomulated as:
FV = PV (1+r)ⁿ
where:
PV = present value of an asset
r = the estimated gworth rate
n = number of years
From the case, we know that the present value of Tammy's is $184,000 and the expected growht rate is 3.5%. Hence, we could summarized that:
PV = $184.000
r = 3.5%
n = 13 years
Hence, the future value of Tammy's house is:
FV = PV (1+r)ⁿ
FV = $184,000 (1+3.5%)¹³
FV = $287,767
The profit Tammy could make if she sell her house after 13 years is:
π = FV - PV
π = $287,767 - $183,000
π = $103,767
π ≈$103,800
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What is the purpose of a limited liability company?
Answers
Cindy has been working for 8 years, and she’s built up a huge emergency fund -- $45,000, which would be 6 months of her salary. She’s hoping to earn a bit more interest than she currently is with that $45,000 just sitting in her traditional bank’s savings account. Which account would you recommend? Why?
SAVINGS ACCOUNT, CD, MONEY MARKET ACCOUNT
Answers
I will recommend she invest the $45,000 in Certificate of deposit or Money market account.
It is widely known that a traditional bank’s savings account does not provides significant interest rate for deposit unlike other account which are meant from pure investment at long term.
A certificate of deposit are issued by bank to customer promising them a certain interest rate on their deposit with them.
A money market is also an method of investing in short term market and guarantees high interest rate on deposit.
Therefore, I will recommend she invest the $45,000 in Certificate of deposit or Money market account.
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What are 10 things that makes a business a disruptor? (must have 10 reasons cannot be the same)
Answers
Some of the things that make a business a disruptor are:
Unstable expectationsIrregular business modelsInconsistenciesComplex business modelsComplex ecosystemsLack of job satisfactionWhat is a Business Disruptor?This refers to the factors that disrupt the normal flow of a business due to inconsistencies, etc.
Hence, we can see that based on the fact that for an effective business to run, it needs to have good vision and mission statements that are clear and easy to follow.
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Production possibilities curve definition economics.
Answers
can somebody plz help? ASAP
Answers
Answer:
More accessible goods
An increase in international trade
A rise in regional Jobs
Describe the benefits that a customer would gain from using your enterprises product/service.
Answers
Answer:
Meeting certain requirements and needs. Your product or service could also offer convenience or comfort.
Explanation:
As you read through the draft of your message, you consider whether parts of your message should be rearranged to make your point more effective. Proofreading Evaluating Editing
Answers
Answer:
The correct answer will be "Editing".
Explanation:
Editing seems to be the process where even the letter being written is reconstructed or reconfigured to more efficiently express the letter. Arranging, modifying, as well as assembling a recorded, written, or video content for official completion, commonly by such an individual except for the producer of the content (considered as an editor).The other options in question aren't relevant to the particular circumstance. So the option available here is just the right one.
The market portfolio is:
A. a completely diversified portfolio, which means that most of the risk unique to individual assets in the portfolio is diversified away
B. a portfolio in which both systematic and unsystematic risk has been diversified away
C. the portfolio that all investors invest their funds in
D. a completely diversified portfolio, which means that all the risk unique to individual assets in the portfolio is diversified away
Answers
The market portfolio is a portfolio in which both systematic and unsystematic risk has been diversified away. Option B is the correct answer.
Due to its comprehensive diversification, a market portfolio is only exposed to systematic risk, or risk that impacts the market as an entire thing, and not particular unsystematic risk, which is the risk specific to a given asset class. Option B is the correct answer.
A market portfolio is a hypothetical collection of assets that comprises every asset type that is accessible to investors, with each asset weighted in proportion to its overall market participation. A market portfolio's anticipated return is the same as the market's overall expected return. Since a completely diversified market portfolio would need to include a part of every asset in existence, including commodities, collectibles, and pretty much anything, it is hard to achieve in practice.
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a good intended for final use by consumers rather than business
Answers
Answer:
A consumer good is a product intended for final use by a consumer.
Explanation:
Consumer good: a good intended for final use by consumers rather than by businesses
The responsibilities of a ________ include collaborating with cross-functional teams on projects and analyzing organizational data.
A. systems analyst
B. consultant
C. business intelligence analyst
D. server administrator
E. technical sales
Answers
The responsibilities of a business intelligence analyst include collaborating with cross-functional teams on projects and analyzing organizational data.
This role involves gathering data from various sources, transforming it into meaningful insights, and presenting findings to stakeholders. Business intelligence analysts use tools and techniques such as data mining, data visualization, and statistical analysis to identify patterns, trends, and opportunities that can help the organization make informed decisions. They work closely with departments such as finance, marketing, and operations to ensure that data is used effectively to achieve business goals. In addition to technical skills, business intelligence analysts must have strong communication and problem-solving abilities to effectively translate complex data into actionable recommendations.
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3 x square minus 2 root 6 X + 2 = 0
Answers
Answer:
-0.8462
Explanation:
Many consumers feel skepticism towards salespeople.
True
False
Answers
Answer:
true
Explanation:
The table shows a point-based grading system.
A 3 column table with 12 rows. Column 1 is labeled Letter grade with entries A plus, A, A minus, B plus, B, B minus, C plus, C, C minus, D plus, D, E/F. Column 2 is labeled Percent grade with entries 97 to 100, 93 to 96, 90 to 92, 87 to 89, 83 to 86, 80 to 82, 77 to 79, 73 to 76, 70 to 72, 67 to 69, 65 to 66, below 65. Column 3 is labeled 4.0 Scale with entries 4, 4, 3.7, 3.3, 3, 2.7, 2.3, 2, 1.7, 1.3, 1, 0.
Jennifer wants to figure out her grade point average for this semester. She received a B in English, a C- in math, and an A in social studies.
Based on the table, what is Jennifer’s GPA?
1.9
2.9
3.0
4.0
Answers
Answer:
ITS 2.9
Explanation:
i did the test
Answer:
its A, 2.9
Explanation:
Which term refers to the systematic collection and analysis of publicly available information about consumers, competitors, and developments in the marketing environment?
Answers
Market intelligence refers to the systematic collection and analysis of publicly available information about consumers, competitors, and the marketing environment.
The term that refers to the systematic collection and analysis of publicly available information about consumers, competitors, and developments in the marketing environment is "market intelligence."
Market intelligence involves gathering data, conducting research, and analyzing information to gain insights into consumer behavior, competitor activities, market trends, and other relevant factors that can inform marketing strategies and decision-making.
It helps businesses understand their target market, identify opportunities and threats, monitor industry trends, and make informed decisions to gain a competitive advantage in the marketplace.
Market intelligence provides valuable insights that enable organizations to adapt their marketing approaches and stay ahead in a dynamic and competitive business environment.
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in the base year, what can we say about real gdp and nominal gdp?
Answers
In the base year, we can say that nominal GDP and real GDP are equal, but in subsequent years, real GDP provides a better measure of economic performance by adjusting for inflation.
In the base year, the inflation rate is zero, which means that the nominal GDP and real GDP are equal. This is because the prices of goods and services in the base year are used to calculate both nominal and real GDP. Therefore, in the base year, we can say that nominal GDP and real GDP are equal.
However, in subsequent years, as prices change, there will be a difference between nominal GDP and real GDP. This difference is due to inflation, which causes the prices of goods and services to increase over time.
As a result, nominal GDP will tend to overstate economic growth, while real GDP will provide a more accurate measure of economic performance by adjusting for inflation.
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Insurance Plan Summary
Deductible
$5,000.00
Wellness Exams
No-deductible
100% covered
What is the monthly
payment an employee
with a family plan on
this health plan is
required to pay, even
if they do not visit a
doctor or hospital?
Premium (monthly)
Individual
$45.00
Individual+Spouse
$400.00
A. $5,000.00
B. $45.00
C. $400.00
D. $0
Answers
Review of ratings & the 80/20 Rule
Rate Review and the 80/20 rule are two tools provided by the health care law to hold insurance companies accountable and assist in limiting costs.
Review of Rate
You are better protected from arbitrary rate increases thanks to Rate Review. Any rate increase of 15% or more must now be disclosed publicly by insurance firms before your premium is increased. Plans that are grandfathered in are exempt from this.
To view the planned and actual rate increases for your insurance plan, look it up online.
80/20 Rule
According to the 80/20 Rule, insurance firms must spend at least 80% of the premium revenue they receive on healthcare expenses and quality-improvement initiatives. Costs for administration, overhead, and marketing can be covered by the remaining 20%.
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