Explain why a firm may not necessarily want to reduce its
price risks to zero by
entering into hedging transactions.

Answers

Answer 1

A company may not necessarily want to reduce its price risks to zero by entering into hedging transactions because there may be costs or risks associated with the hedging transaction itself.

Some reasons why a firm may not want to reduce its price risks to zero through hedging transactions are explained below: Reasons why a firm may not want to reduce its price risks to zero through hedging transactions:

Costs of hedging: Hedging is not free of cost, and the cost of a hedge may reduce a firm's profits. The cost of setting up and maintaining a hedging program might be higher than the potential savings from reducing price risks.

Risk of Hedging: Hedging itself may entail certain risks. For example, if a company enters into a futures contract to lock in a future price, it runs the risk that the counterparty will not honor the contract when the price changes in the future. Alternatively, a company may hedge by purchasing options, which provide the right but not the obligation to buy or sell at a predetermined price. However, purchasing options may be expensive, and if prices remain stable, the cost of the options will not be recouped.

Distraction from Core Business: Executing hedging transactions may divert management's focus from the company's primary business and from creating value for shareholders. While hedging is a crucial aspect of risk management, it should not take priority over the primary business of the firm.

Gains from Price Changes: Some businesses may benefit from price changes rather than being harmed by them. For example, if a company expects to receive a substantial increase in the price of the raw materials it produces, it may elect not to hedge its exposure and instead enjoy the price rise. The same reasoning might apply to a company that expects to receive higher prices for the goods or services it sells.

Therefore, a firm may not necessarily want to reduce its price risks to zero by entering into hedging transactions due to the costs, risks associated with the hedging transaction itself, and gains from price changes.

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Related Questions

when preparing an income statement, which of the following items would most likely be classified as other comprehensive income? a. a foreign currency translation adjustment. b. an unrealized gain on a security held for trading purposes. c. a realized gain on a derivative contract not accounted for as a hedge.

Answers

Option b is correct. An unrealized gain on a security held for trading purposes.

Other comprehensive income (OCI) in company accounting refers to revenues, expenses, gains, and losses that have not yet been realized but are not included in net income on an income statement. The balance between net income and comprehensive income is represented by OCI. A portfolio of bonds that have not yet reached maturity and have hence not been repaid is a typical illustration of OCI. The interim adjustments are therefore recorded in other comprehensive income since the gains or losses resulting from the fluctuating bond value cannot be fully identified until the time of their sale.

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Discuss the role of the father in attachment theory

Answers

Explanation:

Both parents are considered attachment figures in attachment theory, and the child-father attachment is autonomous from the child-mother attachment. Whereas mothers are commonly involved in caregiving and providing emotional refuge, fathers are particularly involved in play and exploratory undertakings.

which types of credit involve repaying different amounts each month

Answers

Revolving credit is the type of credit that involves repaying different amounts each month.

Revolving credit is a type of credit where the borrower can use the credit up to a certain limit. It is a line of credit that can be used again after it has been repaid. The borrower can pay off the balance each month or carry a balance from one month to another. This makes the amount of the monthly payment different each month. The interest rate can also change as the balance changes.

There are two types of credit, revolving credit, and installment credit. Installment credit requires the borrower to repay a fixed amount each month. Revolving credit, on the other hand, does not have a fixed payment. The payment can vary depending on the balance. The borrower can pay the entire balance each month or only pay the minimum payment. If the borrower only pays the minimum payment, the balance will continue to accrue interest, and the payment will increase as well. With revolving credit, the borrower can use the credit again after it has been repaid. A common example of revolving credit is a credit card.

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the difference between ending inventory using lifo and ending inventory using fifo is referred to as the group of answer choices fifo reserve. inventory reserve. lifo reserve. periodic reserve.

Answers

The difference between ending inventory using LIFO and ending inventory using FIFO is referred to as the LIFO reserve.

The difference between ending inventory using LIFO and ending inventory using FIFO is referred to as the LIFO reserve. The LIFO reserve is a component of the inventory reserve, which is the amount of money set aside to cover any losses that may arise from inventory obsolescence, damage, or theft. The LIFO reserve is a type of periodic reserve, which is the difference between the ending inventory value under one inventory method and the value under another inventory method, calculated at the end of each accounting period.

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An entity must adjust its financial statement for an event that occurs after the end of the reporting period if:

Answers

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Note that common tasks are listed toward the top, and less common tasks are listed toward the bottom.
according to o*net, what are common tasks performed by nursery and greenhouse managers? check all that
apply.

touring woki areas to observe work

harvesting vegetables

u managing nurseries

analyzing the best way to harvest timber

creating decorative floral arrangements for events

identifying plants and problems with them

Answers

Answer:

creating decorative floral arrangements for events

Ics provides a standardized approach to the command control and coordination of:.

Answers

ICS provides a standardized approach to the command control and coordination of On-scene emergency personnel.

What is ICS?

ICS refers to the Incident Command System, which is a system that follows a standardized approach which provides control of emergency and common hierarchy hence, responders from the agencies could be more effective.

On- scene emergency which become vital part of the situation or activity and in this ICS offers a approach to the coordination and command of the emergency personnel.

Hence, ICS provides a standardized approach to the command control and coordination of On-scene emergency personnel.

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20 POINTS AND WILL GIVE BRAINLY
PLS ANSWER

20 POINTS AND WILL GIVE BRAINLY PLS ANSWER

Answers

you're right hope it helps answer d
It’s is C i’m sure :)))

Please help I’ll give you brainiest

Please help Ill give you brainiest

Answers

Because we do not have the clip, I'll just provide definitions to each answer.

competing: striving against one another to gain or win something.

collaborating: work jointly on an activity, especially to produce or create something.

compromising: settle a dispute by mutual concession.

accommodating: fit in with the wishes or needs of.

avoiding: keep away from or stop oneself from doing (something).

Which of the following is a type of sales promotion?

Free Samples

All of these

Coupons

Customer Loyalty Programs

Answers

All of these is your answer

Free Samples, Coupons, and Customer Loyalty Programs are the types of sales promotion. All of the above is the correct option. The correct option is B.

Free samples increase the possibility of future sales by enabling consumers to test a product before making a purchase.

Coupons encourage consumers to make purchases and may draw in new clients by providing discounts or special offers on goods or services.

Customers that use loyalty programs frequently receive points, awards, or special deals in exchange for their continued business. These initiatives try to keep current clients and promote reordering.

Thus, the ideal selection is option B.

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Which of the following would most likely increase the demand for hot dog buns?
a. An increase in the price of wheat used in the production of the buns.
b. A decrease in the number of consumers of hot dog buns.
c. A decrease in the price of hot dogs.
d. A decrease in the price of hot dog buns.

Answers

Demand for hot dog buns would decline if there were fewer consumers, and it would also decline if the price of hot dog buns decreased. Option C is the correct response to the query.

A reduction in the cost of hot dogs. The demand for hot dog buns will rise as the price of hot dogs drops. The reason for this is because the price of a good and the quantity it is demanded have an inverse connection. In plainer English, individuals are more likely to purchase hot dogs when the price decreases.

Because more people will want to eat hot dogs and thus buy more buns, this will result in an increase in the demand for hot dog buns.An increase in the price of wheat used in the production of the buns will lead to a decrease in supply and an increase in the price of hot dog buns.

This will lead to a decrease in the demand for hot dog buns.A decrease in the number of consumers of hot dog buns would lead to a decrease in demand, and a decrease in the price of hot dog buns would cause a decrease in demand.

Therefore, the correct answer is option C, a decrease in the price of hot dogs.

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Question 10 of 10
Which of the following fall under the marketing umbrella?
O A. Customer service and production
B. Finance and operations
O c. Public relations and advertising
D. Human resources and administration

Answers

Answer:

c. Public relations and advertising

Explanation:

Marketing refers to all the activities of interesting potential customers with a company's products and services. Its objective is to create product awareness among customers and increase sales. Marketing involves acquiring customers to buy the company's products.

Marketing activities range from research on customer needs, advertising, sales promotions, public relations, and sales.

Answer C it the correct answer

Explanation:

jackson company had a net increase in cash from operating activities of $10,000 and a net decrease in cash from financing activities of $2,000. if the beginning and ending cash balances for the company were $4,000 and $11,000. based on this information, what was the amount of expenses reported on calloway's income statement for the current year?

Answers

The amount of expenses reported on Calloway's income statement for the current year is -$15,000.

However, this is not a reasonable result, since expenses cannot be negative.

This indicates that there is a mistake in the calculation somewhere.

Given: Beginning cash balance = $4,000

Ending cash balance = $11,000

Net increase in cash from operating activities = $10,000

Net decrease in cash from financing activities = $2,000

To find: Amount of expenses reported on Calloway's income statement for the current year

To calculate the amount of expenses reported on Calloway's income statement for the current year, we need to use the formula:

Beginning Cash Balance + Net increase from Operating Activities - Net decrease from Financing Activities

= Ending Cash Balance

$4,000 + $10,000 - $2,000 = $12,000

But we know that the ending cash balance is given as $11,000.

Therefore,

$4,000 + $10,000 - $2,000 = $11,000

We can then use this information to find the amount of expenses reported on Calloway's income statement for the current year, which is equal to the difference between the beginning cash balance and the ending cash balance, minus the net increase in cash from operating activities, and plus the net decrease in cash from financing activities.

Expenses reported on Calloway's income statement for the current year

= Beginning cash balance - Ending cash balance - Net increase from Operating Activities + Net decrease from Financing Activities

= $4,000 - $11,000 - $10,000 + $2,000= $-15,000

Therefore, the amount of expenses reported on Calloway's income statement for the current year is -$15,000.

However, this is not a reasonable result, since expenses cannot be negative.

This indicates that there is a mistake in the calculation somewhere.

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Assume Global Cleaning Service had a net income of $570 for the year, Global Cleaning Service's beginning and ending total assets were $4,520 and $4,180, respectively. Calculate Global Cleaning Service's return on assets (ROA).

Answers

Global Cleaning Service's return on assets (ROA) is 13.1%, which indicates that the company generated $0.131 in net income for every dollar of total assets during the year.

What's ROA

ROA is a financial ratio that indicates the profitability of a company in relation to its total assets. It is calculated by dividing the net income by the average total assets.

In this case, Global Cleaning Service had a net income of $570 for the year. The beginning total assets were $4,520, and the ending total assets were $4,180.

To calculate the average total assets, we can add the beginning and ending total assets and divide by 2:

Average Total Assets = (Beginning Total Assets + Ending Total Assets) / 2

Average Total Assets = ($4,520 + $4,180) / 2

Average Total Assets = $4,350

Now, we can calculate the ROA:

ROA = Net Income / Average Total Assets

ROA = $570 / $4,350

ROA = 0.131 or 13.1%

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ECONOMICS CHAPTER 2 SECTION 3

explain the relationship between the terms in each of these pairs
A. Private property rights and market
B. laissez-faire and capitalism
C. Specialization and profit
D. Factor market and product market

ECONOMICS CHAPTER 2 SECTION 3

Answers

Private property rights  and market is  in which people buy and sell resources or goods and services.

Private property rights are the rights of individuals and groups to own property and the market is any place or situation in which people buy and sell resources and goods and services.

Laissez-faire and capitalism-The relation-ship between laissez-faire and capitalism is laissez-faire is an economic philosophy of free-market capitalism that opposes government intervention.

Specialization and profit- The relation-ship between specialization and profit is the companies specialize in making one product or one component of a product, if this product will make at large scale, companies reduces it's cost to earn profit.

Factor market and product market-  The relation-ship between Factor market and product market is the factor market is running by the demand of product market. The product market is sold their goods and services with the demand of factor market to production these goods and services.

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the courses jacob has been taking that relate to his current job fall into which category? multiple choice development interpersonal relationships career management assessment training

Answers

The courses Jacob has been taking that relate to his current job fall into the training category. Option D

This is further explained below.

What is training?

Generally, Teaching, or developing in oneself or others, any skills, knowledge, or fitness related to certain relevant competencies is what we mean when we talk about training.

Training is designed to improve a person's capabilities, capacities, productivity, and performance in specified ways.

Training refers to the process of enhancing an employee's knowledge and abilities in preparation for performing their duties in a certain job. The goal is to enhance both the job performance and the behavior of people who have been taught.

In conclusion, Training because the primary goal of training is to assist people in becoming more productive in their existing positions.

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After submitting a résumé by mail, how long should you wait before following up with an employer? a. 1 day b. 2-3 days c. 1 week d. 2 weeks Please select the best answer from the choices provided A B C D.

Answers

After submitting a résumé by mail, it is advisable to wait for a period of one week before following up with an employer. In terms of the question above, option C - 1 week is the best answer, and this answer will be discussed more extensively below.

A résumé is a one-page document that provides information about an individual's experience, skills, and education. It is generally the first step in the job application process, and it provides employers with a snapshot of the applicant's qualifications and suitability for a particular job.

However, after submitting a résumé, it is common to wonder when to follow up with an employer. The waiting period after submitting a resume is typically one week. It's important to give the employer ample time to review your résumé, but following up too soon can also come across as pushy or overeager.

After a week has passed, it is appropriate to reach out to the employer to inquire about the status of your application. You may also take the initiative to call or email the employer, expressing your interest in the position and asking about the next steps in the application process.

The follow-up can be a great opportunity to show your enthusiasm for the job and to learn more about the company's expectations.

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What is the number Bergman left on Wigand's voice mail? 
O (210)555-9119 
O (510) 555-0199 
O (555) 555-5555 
O (310) 555-1099

Answers

In the film "The Insider," Bergman leaves a voicemail for Wigand with the phone number (310) 555-1099. The correct answer is option d.

This number is later revealed to belong to a lawyer named Richard Scruggs, who is interested in pursuing a lawsuit against the tobacco industry.

Scruggs is a key figure in the legal battle that Wigand becomes involved in after he reveals confidential information about the dangers of tobacco to Bergman and "60 Minutes."

The phone number is significant because it shows how Wigand's story has attracted the attention of powerful individuals who are willing to take on the tobacco industry.

The fact that Scruggs is willing to provide Wigand with legal assistance also highlights the risks that Wigand is taking by speaking out.

Overall, the number Bergman leaves on Wigand's voicemail is a small but important detail that helps to further the plot of the film and highlight the complex web of interests involved in the tobacco industry.

The correct answer is option d.

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complete question

What is the number Bergman left on Wigand's voice mail?

a. (210)555-9119

b.  (510) 555-0199

c. (555) 555-5555

d. (310) 555-1099

the plan that is best suited to identify the long term requirement of capacity is: group of answer choices aggregate production plan material requirements plan material management plan master schedule

Answers

Aggregate production plan  is best suited to identify the long term requirement of capacity.

What is aggregate production planning (APP)?

Planning for aggregate output is helpful for operation management. It relates to setting up production, inventory, and staffing levels to meet shifting demand over a planning horizon of anything between six months and a year. Plans for aggregate production are essential for operations management and are required to take advantage of labor opportunities. For a brief or medium amount of time, this strategy aids in maintaining market equilibrium between supply and demand. Aggregate production planning's (APP) primary objective is to maximize manufacturing while lowering operating expenses.

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The country of sudan has an estimated annual growth rate of 2 percent. at this rate of growth, approximately how many years will it take for the population of sudan to double?

Answers

According to estimates, Sudan's annual growth rate is 2%. The population of Sudan will double in about 35 years if growth continues at this rate.

How is the annual growth rate determined?

By considering the average revenue for a specific time period, annual growth rates are determined. The finishing value of an investment or asset is divided by the asset's initial value in the yearly growth rate formula. You get a decimal point that can be converted into a percentage when you take one out of this amount.

Growth rate = (Current value / Previous value) x 1/N - 1 is the formula.

Add the current value to the previous value and subtract it: Subtract the prior value from the present value to obtain the difference between the two. Current value minus Previous value equals Difference.

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how do fraud symptoms help in detecting fraud?

Answers

Fraud symptoms are warning signs that can help detect potential fraudulent activities. They can serve as red flags that can alert an individual or organization to take a closer look at a situation to determine if fraud is occurring.

Some common fraud symptoms include:

Unusual or suspicious transactionsMissing or altered documentsInconsistent or incomplete financial recordsUnexplained changes in financial performanceUnusual or excessive expensesConflicts of interestPoor internal controls

By being aware of these fraud symptoms, individuals and organizations can take proactive steps to prevent fraud from occurring or detect it early on before significant financial losses occur. It is important to note that the presence of one or more of these symptoms does not necessarily mean that fraud is occurring, but it does warrant further investigation.

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Please help with this question

Please help with this question

Answers

Answer:

Number 1: from

Number 2: place

Number 3: information utility

Number 4: Possession

Explanation:

1. The formula for continuously compounded interest is A = Pe^rt, where A is the amount of money in the account, P is the initial investment, r is the interest rate, and t is the time in years. Using the formula, determine, to the nearest dollar, the amount in the account after 8 years if $750 is invested at an annual rate of 3%​

Answers

Answer:

the  amount in the account after 8 years is $954

Explanation:

The computation of the amount in the account after 8 years is shown below"

Given that

The formula for continuously compound interest is

Amount = Principal e^(rate) (time period)

= $750 × e^(0.03)(8)

= $954

Hence, the  amount in the account after 8 years is $954

The same is to be considered by applying the above formula

The figure in the amount column is sometimes referred to as 'cumulative balance'. Why is it referred to in this way?

Answers

Answer:

Explanation:

For each transaction, you add to the previous balance to keep a running total.

The manager of company A is thinking about adding an air conditioner to the office. The AC will cost $1950 to buy and install. The manager plans to use the AC for 5 years and each year's depreciation rate is 12% of the purchase price. The manager expects to sell the AC in 5 years for $200. The tax rate is 40% and the company's WACC is 11%. If the manager considers this purchase of AC as an investment, what is the NPV

Answers

In this case, the NPV of the investment is $313.

What is the analysis for this?

The initial investment is $1950. The annual depreciation expense is $234 (1950 * 0.12).

The after-tax depreciation expense is $140.40 (234 * (1 - 0.40)). The after-tax salvage value is $80 (200 * (1 - 0.40)).

The annual after-tax cash flows are $140.40 + $80 = $220.40. The NPV is calculated as follows

NPV = -Initial investment + Sum of annual after-tax cash flows / (1 + WACC)ⁿ

where -

NPV = net present value

Initial investment = $1950

WACC = weighted average cost of capital = 11%

n = number of years = 5

NPV = -1950 + 220.40 / (1 + 0.11)⁵

NPV = $313

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Tonya is considering leaving work early to go to a baseball game. A ticket costs $30, and it costs $5 to park at the stadium. Tonya will miss 3 hours of work, where she is paid $20 an hour. What is Tonya's total explicit cost of going to the game?

Answers

Answer:

$95

Explanation:

UwU

A city starts a solid waste landfill during 2017. When the landfill was opened the city estimated that it would fill to capacity within 5 years and that the cost to cover the facility would be $1.5 million which will not be paid until the facility is closed. At the end of 2017, the facility was 20% full, and at the end of 2018 the facility was 45% full. If the landfill is judged to be a governmental fund, what liability is reported on the fund financial statements at the end of 2018

Answers

Answer:

The interpretation of the particular question is outlined in the following segment on the clarification.

Explanation:

The facility was indeed 20 percent full by either the end of December 2017 therefore the 3,00,000 would still have been recognized as an expenditure.

The facility also seems to be 45 percent complete at either the end of 2018, meaning that the 3,75,000 will have been accepted as expenditures,

⇒  \(1,500,000\times (45 \ percent-20 \ percent)\)

By most of the end of the decade, the financial sheet provides a snapshot 6,75,000 although this debt would be,

⇒  \(1,500,000\times 45 \ percent\)

So 3,75,000 should have been shown as the cost of the rest in the financial information for 2018, as well as 6,75,000 would have been shown as contractual obligations.

Need help ASAP. Will mark brainliest

Need help ASAP. Will mark brainliest

Answers

Answer:

click the top on and the socond option

Explanation:

The nature of demand indicates that as the price of a good increases.

Answers

The nature of demand indicates that as the price of a good increases D) buyers desire to purchase less of it.

What is the demand curve?

The demand curve is a graphic representation of the relationship between price and the quantity demanded.

All things being equal, the demand curve shows a downward sloping demand when the price of goods increases because buyers purchase less quantity of the goods.

Answer Options:

A) suppliers wish to sell less.

B) more of it is produced.

C) more of it is desired.

D) buyers desire to purchase less of it.

Thus, the nature of demand indicates that as the price of a good increases D) buyers desire to purchase less of it.

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Distinguish between medium and higher level education with
illustration.​

Answers

medium level profession can be defined as some one who has moved past entry level but isn't nearing the end . whereas high level profession means a person has moved past entry level and also has reached the end.

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. A company produces two products, A and B, which have profits of $9 and $7, respectively. Each unit of product must be processed on two assembly lines, where the required production times are as follows. Product Hours/Unit Line 1 Line 2 A 12 4 B 4 8 Total hours 60 40 a) Formulate a linear programming model to determine the optimal product mix that will maximize profit. b) Transform this model into standard form. If you were apple, What research would you want to see within the proposal to approve a new app for the ipad Why is data processing done in computer? On January 1, 2019, Wasson Company purchased a delivery vehicle costing $47,550. The vehicle has an estimated 7-year life and a $4,500 residual value. Wasson uses the units-of-production depreciation method and Wasson estimates that the vehicle will be driven 105,000 miles. What is the vehicle's book value as of December 31, 2020, assuming the vehicle was driven 10,500 miles during 2019 and driven 18,500 miles during 2020 What rhetorical appeals does Mink use?How are they effective? Which of the following inferences is best supported by the passage below (paragraph 4)?Miss Theenie stood watching. One by one, her children had left her and gone up north. Sam and Cleve to Ohio. Josie to Syracuse. Irene toMilwaukee. Now the man Miss Theenie had tried to keep Ida Mae from marrying in the first place was taking her away, too. Miss Theenie had nochoice but to accept it and let Ida Mae and the grandchildren go for good. Miss Theenie drew them close to her, as she always did wheneveranyone was leaving. She had them bow their heads. She whispered a prayer that her daughter and her daughter's family be protected on thelong journey ahead in the Jim Crow car.A. Many young African Americans left the South in search of better treatment and opportunities in the North.B. Elderly family members were often too stubborn to leave the South because they were used to the cultural norms there.OC. Young African Americans migrated to the North, looking for work, before they helped their elderly family members join them.D. White men often married African American women'in order to help them migrate to the North and seek better opportunities. Why die Spanish explorers travel to the Americans A student is comparing the mass of four bananas to the mass of four apples what is the difference in mass in grams between the bananas and the apples Evaluate (2)6Enter your answer in the box. Mr. Krueger wanted a square platform built in the drama room atschool. He provided the carpenter with the desired area of the platformto be built. Which function can he use to determine the side length ofthe square platform? What is the name of the molecule below?GO A. EthyneO B. EtheneC. MetheneOD. MethyneH-C=C-H In the gal gene system, which protein binds to the activation domain of the activator protein, ultimately blocking transcription in the absence of galactose?. Which clades fall within Gnathostoma?a. Actinopterygiib. Reptiliac. Chondrichthyes Which statement applies only to electric force instead of both electric and magneticforces?A. It can push objects apartB. It can pull objects togetherC. It acts between charged particlesD. It acts between objects that do not touch Assume that each circle shown below represents one unit. Express the shaded amount as a single fraction and as a mixed number. Question 11 (1 point)Anytime there is height, the object must have...akinetic energygravitational potential energyGPE & KPECOdelastic potential energy Suppose the Federal Reserve buys $400,000 worth of securities from the securities dealers on the open market. If the reserve requirement is 20% and the banks hold no excess reserves, what will happen to the total money supply Calculate Taylors total years of service if her current monthly pension payment is $1338.75 and her company paid 1.5% per year of service on an average annual wage of $51,000A. 21B. 15C. 23D. 18 A single card is drawn at random from a standard 52 card deck.Work out the following probabilities in their simplest form Help ASAP its either 68degrees 110 degrees 136 degrees or 112 degrees