You are the treasurer of Arizona Corp. and must decide how to hedge (if at all) future receivables of 350,000 Australian dollars (A$) 180 days from now. Put options are available for a premium of $.02 per unit and an exercise price of $.50 per Australian dollar. The forecasted spot rate of the Australian dollar in 180 days is: Future Spot Rate Probability
$.46 20%
$.48 30%
$.52 50%
The 90-day forward rate of the Australian dollar is $.50.
U. S. deposit rate for 1 year = 1%
U. S. borrowing rate for 1 year = 4%
Australian deposit rate for 1 year = 3%
Australian borrowing rate for 1 year = 6%
(a) What option strategy can Arizona use to hedge its receivables?
(b) What is the probability that the option will be exercised (assuming Arizona purchased it)?
(c) What will be the net receivables if the option is exercised?
(d) Is the option strategy better than a forward contract?
(e) Explain how Arizona can conduct a money market hedge?
(f) What will be the net receivables for Arizona with the money market hedge?
(g) Would leaving the receivables unhedged be better than any of the hedging strategies?

Last week, linda's commission check was $84. if she earns a 12.5% commission on sales, what were her total sales?

You manage an equity fund with an expected risk premium of 10% and a standard deviation of 14%. the rate on treasury bills is 6%. your client chooses to invest $60,000 of her portfolio in your equity fund and $40,000 in a t-bill money market fund. what is the expected return and standard deviation of return on your client’s portfolio?

Required information [the following information applies to the questions displayed below.] the following data is provided for garcon company and pepper company. garcon company pepper company beginning finished goods inventory $ 13,800 $ 18,850 beginning work in process inventory 16,700 20,700 beginning raw materials inventory 8,800 13,500 rental cost on factory equipment 28,250 26,650 direct labor 22,400 37,400 ending finished goods inventory 17,300 14,300 ending work in process inventory 23,200 19,400 ending raw materials inventory 5,900 9,600 factory utilities 11,250 15,000 factory supplies used 10,900 5,700 general and administrative expenses 32,500 44,500 indirect labor 2,500 9,880 repairs—factory equipment 4,820 2,150 raw materials purchases 41,500 63,000 selling expenses 54,800 49,000 sales 238,530 317,510 cash 33,000 23,700 factory equipment, net 222,500 124,825 accounts receivable, net 13,400 23,950 required: 1. complete the table to find the cost of goods manufactured for both garcon company and pepper company for the year ended december 31, 2017. 2. complete the table to calculate the cost of goods sold for both garcon company and pepper company for the year ended december 31, 2017.