Question 9: The following table gives data on monthly changes in the spot price and the futures price for a certain commodity. Use the data to calculate a minimum variance hedge ratio.

Q: Going beyond just calculating NPV, discuss it qualitatively. What is it used for? Is it a good…

A: Net present value is defined as the difference between the PV of the cash inflows as well as present…

Q: How do your answers in parts (a) and (b) relate to the theory of constraints? Explain.

A: Introduction:- Constraints theory used to identifying the most important limiting factor that…

Q: Explain about the Black–Scholes model.

A: Black Scholes option pricing model is probably the most commonly used option pricing model in…

Q: How do you explain or interpret predictive model information?

A: Meaning- Predictive Model As the name suggest, where with the help of historical figures or even…

Q: For practical applicationsas opposed to theoretical considerations, which ismore relevant, the CML…

A: Security market line (SML) or Capital market line (CML): The capital market line appears the…

Q: the strengths o

A: Strengths of  scientific approach  Researchers employing survey methods to collect data enjoy a…

Q: This focuses on what happens. a. Technical analysis b. Fundamental analysis c. Both fundamental and…

A: Technical analysis focus on the movement of the stock price and use that data to predict the future…

Q: Describe the fundamentals of Replacement-Analysis?

A: Replacement analysis is the process where it is determined whether it would be beneficial to replace…

Q: What are the assumptions and criticisms of Gordon’s model?

A: Gordon's model, also known as the Gordon Growth Model, is a widely used method for valuing stocks.…

Q: What is the objective of having a conceptual framework?

A: Conceptual framework means set of rules and guidelines that help the users and preparers in…

Q: What is counterbalancing?

A: Errors: The comparability and consistency of the financial statements decreases when a company…

Q: What is sensitive analysis?

A: Sensitive analysis is a method for predicting the outcome of a decision if a situation turns…

Q: What are the assumptions of Walter’s model?

A: The Walter Model of Careers is an influential theory in the field of career development. This model…

Q: Explain Replacement-Analysis Fundamentals?

A: Replacement-analysis fundamentalUnder this, the decision regarding the replacement of obsolete as…

Q: what is a provable intrinsic value? can you give a example

A: Intrinsic value of a stock is its fundamental value. This is calculated by taking in to…

Q: What does the EMH imply for the use of technical and fundamental analysis?

A: The efficient market hypothesis (EMH), as a substitute called the efficient market theory. It is a…

Q: What differential analysis and why would we use it?

A: Decision making is the process of taking the decisions based on the costs and different kind of…