The major difference between future and option arises from the different obligations of buyers and sellers''. Explain

Q: A call option holder has an obligation to sell the asset. True or false?

A: A call option is an instrument which provides its holder an option to buy an underlying asset on a…

Q: The production manager of Rordan Corporation has submitted the following quarterly production…

A: Direct labor budget provides details of budgeted labor hours to be consumed and budgeted direct…

Q: What document is the difference between a primary and a secondary market?

A: Primary Market: The primary market is where new securities are formed, while the secondary market is…

Q: etween: i. A Primary Market and Secondar

A: Primary Market The process through which a market becomes a source of securities is referred to as a…

Q: (i) Discuss the role of the three main categories of participants in derivative markets.…

A: Derivative markets are a part of financial market where the value of a contract is derived from its…

Q: How can sales and lease contracts be effectively structured to align incentives and maximize…

A: The objectives of the seller's profitability and the lessee's value expectations must be balanced in…

Q: What are the two best arguments against debt reduction (i.e., the cons)?

A: The term "debt reduction" is also known as debt settlement. As the name suggests, it…

Q: what is the fair value option? explain how the use of fair value option reflect application of the…

A: Fair Value option is that the board has taken an additional step of giving companies the option to…

Q: According to the fair value principle, assets and liabilities should be reported Select answer from…

A: The fair value principle is an accounting concept that aims to provide a more accurate…

Q: Describe the accounting for the fair value option.

A: The fair value option allows the business to record its assets and liabilities at their fair value.…

Q: what is the difference between '' going long '' and '' going short''? is going short allowed in all…

A: The question is based on the concept of Accounting theory.

Q: Highlight the key difference between option, futures and forward contracts.

A: Option, futures and forwards are three examples of financial derivatives. Option gives traders the…

Q: What are the main arguments against the old definition (i.e. the one presented in Appendix A of AASB…

A: Disclaimer: “Since you have asked multiple questions, we will solve the first question for you. If…

Q: Share option compensation is what accounting subject?

A: Stock-based compensation: It is a way of paying employees, executives, and directors of a company…

Q: Determine if this shall result in recognition of liabilities 15.Violation of the terms of agreement…

A: As per IAS 37, of IFRS Provisions, contingent liabilities and contingent assets If likelihood of…

Q: What are the main criticisms of the Capital Asset Pricing Model (CAPM)? What does the empirical…

A: Capital Asset Pricing Model is a financial theory stating the linear relationship between required…

Q: Discuss the assumptions, approach, estimation, benefits, limitations, and criticisms of Arbitrage…

A: Arbitrage Pricing Theory is a multi-factor pricing model. Arbitrage Pricing Theory can be used to…

Q: What contingencies are commonly found in permanent or take-out loan commitments? Why are they used?…

A: The contingencies found in permanent or take-out loan commitments and their use are as follows: A…

Q: describe the role of forward markets and futures markets in price discovery.   b)discuss three…

A: A derivative is a financial contract whose value is derived from the underlying asset, which could…

Q: Fair Value Measurement Concept Question: What does it mean when fair value is paid to transfer a…

A: Fair Value: It is a measurement based on the current market situation. It is not specific to any…

Q: What is meant by a primary market transaction and a secondary market transaction? Give an example

A: Primary market are market where equity or bonds are issued to investors for the first time.So you…

Q: Would you prefer using negotiable instruments as a form of payment rather than using traditional…

A: A negotiable instrument is an archive that ensures installment of a particular measure of cash to a…

Q: Explain the following concepts: (a) bargain purchase option and (b) bargain renewal option.

A: Lease agreement refers to an agreement in which a contract is made to get the asset on lease. The…

Q: How one determines where to borrow or not? What factor into the decision making process?

A: The act of borrowing money or the sum of money borrowed by an individual, company, government, or…

Q: Do U.S. GAAP and IFRS differ in the amount of flexibility that companies have in electing the fair…

A:

Q: Under which circumstances can the speculator gain a profit and what is the risk of carry trades?

A: The big risk in a carry trade is the uncertainty of exchange rates. Using the example above, if the…

Q: difference between debt and quity

A: A company’s capital consists of two forms, one is equity and the other is debt. When a company is…

Q: Discuss how equity can be viewed as an option. Who has theoption, and what decision can they make?

A: If an enterprise cannot satisfy its contractual obligation of debt, it is in default for every…

Q: What is a futures contract? What are the key differences between forward andfutures contracts?

A: Futures Contract are the Promises made between two parties on the platform called exchange for the…

Q: Declining Balance

A: Declining balance method is an accelerated depreciation system of recording larger depreciation…

Q: (Based on Appendix 9) Define purchase commitments. What is the advantage(s) of these agreements to…

A:

Q: hat are broker markets? What are dealer ow do they differ?

A: Introduction: In the trade market, there are several types of the market associated with it. Two of…

Q: The use of the fair value option to account for Non - current liabilities is allowed by IFRS . Many…

A: Under fair value accounting the assets and liabilities are recorded in the financial statements at…

Q: What is the fair value option?

A: Fair value: Fair value is the price at which, both seller and buyer agree to exchange the asset. So,…

Q: What tools are available for solving adverse selection and moral hazard problems in debt contracts…

A: There may arise various problems like adverse selection and moral hazards problem in equity and debt…

Q: Is the “forward price” the same thing as the “value of the forward contract” Explain.

A: Derivative is defined as the contract, which are between the two or more parties, who has the value…

Q: Explain the nature of an option contract.

A: An option contract is a financial derivative instrument that gives the holder the right, but not the…

Q: How are sellers constrained from recognizing variable consideration, and under what circumstances…

A: The seller generally recognizes the amount of revenue which they believe will be received. In case…

Mortgages

A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.

Mortgage

The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.