Patrick is a portfolio manager for the Hyper Tally Growth Fund. It has generated an annualized rate of return of 10% this past year. However, with the anticipation of very high inflation to soon occur, there is also an expectation of higher interest rates. Patrick is concerned about the future returns of existing stocks within the fund. What may Patrick do to protect against the market value of the fund dropping? O Purchase put options for the fund's existing assets. O Agree to buy forward contracts where he is in the "long" position. O Buy call options for the existing stocks stored within the fund. O Avoid the use of derivatives because they are speculative in nature.
Patrick is a portfolio manager for the Hyper Tally Growth Fund. It has generated an annualized rate of return of 10% this past year. However, with the anticipation of very high inflation to soon occur, there is also an expectation of higher interest rates. Patrick is concerned about the future returns of existing stocks within the fund. What may Patrick do to protect against the market value of the fund dropping? O Purchase put options for the fund's existing assets. O Agree to buy forward contracts where he is in the "long" position. O Buy call options for the existing stocks stored within the fund. O Avoid the use of derivatives because they are speculative in nature.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![Patrick is a portfolio manager for the HyperTally Growth Fund. It has generated an annualized rate of return of 10% this past year.
However, with the anticipation of very high inflation to soon occur, there is also an expectation of higher interest rates. Patrick is
concerned about the future returns of existing stocks within the fund. What may Patrick do to protect against the market value of the fund
dropping?
Purchase put options for the fund's existing assets
Agree to buy forward contracts where he is in the "long" position
O Buy call options for the existing stocks stored within the fund.
Avoid the use of derivatives because they are speculative in nature](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F70562eea-c2fb-4751-9e42-c7c37c89fd29%2F608b5890-9242-4a54-970e-c70564d78730%2Fx8do41x_processed.png&w=3840&q=75)
Transcribed Image Text:Patrick is a portfolio manager for the HyperTally Growth Fund. It has generated an annualized rate of return of 10% this past year.
However, with the anticipation of very high inflation to soon occur, there is also an expectation of higher interest rates. Patrick is
concerned about the future returns of existing stocks within the fund. What may Patrick do to protect against the market value of the fund
dropping?
Purchase put options for the fund's existing assets
Agree to buy forward contracts where he is in the "long" position
O Buy call options for the existing stocks stored within the fund.
Avoid the use of derivatives because they are speculative in nature
![Elag for
Your client wants to do a course in accounting to further his career prospects. He does not have the necessary funds to enrol for the
program but wants to withdraw the tuition fee using the Lifelong Learning Program (LLP).
Which of the following statements about the LLP is TRUE?
O The educational program may be full or part-time.
Repayment of the LLP has to be made within 15 years.
O Withdrawals may take place over a maximum period of 2 calendar years.
Maximum total withdrawal is $20,000 with a yearly maximum of $10,000.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F70562eea-c2fb-4751-9e42-c7c37c89fd29%2F608b5890-9242-4a54-970e-c70564d78730%2Figro4h9_processed.png&w=3840&q=75)
Transcribed Image Text:Elag for
Your client wants to do a course in accounting to further his career prospects. He does not have the necessary funds to enrol for the
program but wants to withdraw the tuition fee using the Lifelong Learning Program (LLP).
Which of the following statements about the LLP is TRUE?
O The educational program may be full or part-time.
Repayment of the LLP has to be made within 15 years.
O Withdrawals may take place over a maximum period of 2 calendar years.
Maximum total withdrawal is $20,000 with a yearly maximum of $10,000.
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