Financial instrument : A financial instrument can be cash, or a share of ownership (stock investments), or a contractual obligation to deliver (accounts payable) or receive cash ( accounts receivable ), or a contractual obligation to exchange financial instruments (like stock options). To explain : The reason for financial instruments being called as derivatives

Question

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Answer 1

Question

Chapter A, Problem A.1Q

To determine

Financial instrument: A financial instrument can be cash, or a share of ownership (stock investments), or a contractual obligation to deliver (accounts payable) or receive cash (accounts receivable), or a contractual obligation to exchange financial instruments (like stock options).

To explain: The reason for financial instruments being called as derivatives

Expert Solution & Answer

Explanation of Solution

Some financial instruments are meant for managing risk in the financial markets. These financial instruments exist to safeguard against the risk created by other financial instruments. Some examples of such financial instruments are forward contracts, interest rate swaps, futures, and options. These financial instruments derive the values from the future value of underlying security or index. Hence, some financial instruments are called as derivatives.

Conclusion

Since some financial instruments derive the values from the future value of underlying security or index, they are called as derivatives.

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Calm Ltd has the following data relating tò two investment projects, only one of which mayb e s e l e c t e d :The cost of capital is 10 per cent, and depreciation is calculated using straight line method.a . Calculate for each of the project:i. Average annual accounting rate of return on average capital investedi i . Net Present Valuei l l . I n t e r n a l R a t e o f Returnb. Discuss the relative merits of the methods of evaluation mentioned above in (a).Q.4a . In the context of process costing, discuss the following concepts briefly, i . Equivalent unitsNormal lossill. Abnormal lossi v. Joint productsV . By productsb . Discuss the different types of standard costing and objectives of standard costing.

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Answer 2

Question

Chapter A, Problem A.1Q

To determine

Financial instrument: A financial instrument can be cash, or a share of ownership (stock investments), or a contractual obligation to deliver (accounts payable) or receive cash (accounts receivable), or a contractual obligation to exchange financial instruments (like stock options).

To explain: The reason for financial instruments being called as derivatives

Expert Solution & Answer

Explanation of Solution

Some financial instruments are meant for managing risk in the financial markets. These financial instruments exist to safeguard against the risk created by other financial instruments. Some examples of such financial instruments are forward contracts, interest rate swaps, futures, and options. These financial instruments derive the values from the future value of underlying security or index. Hence, some financial instruments are called as derivatives.

Conclusion

Since some financial instruments derive the values from the future value of underlying security or index, they are called as derivatives.

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Answer 3

Question

Chapter A, Problem A.1Q

To determine

Financial instrument: A financial instrument can be cash, or a share of ownership (stock investments), or a contractual obligation to deliver (accounts payable) or receive cash (accounts receivable), or a contractual obligation to exchange financial instruments (like stock options).

To explain: The reason for financial instruments being called as derivatives

Expert Solution & Answer

Explanation of Solution

Some financial instruments are meant for managing risk in the financial markets. These financial instruments exist to safeguard against the risk created by other financial instruments. Some examples of such financial instruments are forward contracts, interest rate swaps, futures, and options. These financial instruments derive the values from the future value of underlying security or index. Hence, some financial instruments are called as derivatives.

Conclusion

Since some financial instruments derive the values from the future value of underlying security or index, they are called as derivatives.

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Answer 4

Question

Chapter A, Problem A.1Q

To determine

Financial instrument: A financial instrument can be cash, or a share of ownership (stock investments), or a contractual obligation to deliver (accounts payable) or receive cash (accounts receivable), or a contractual obligation to exchange financial instruments (like stock options).

To explain: The reason for financial instruments being called as derivatives

Expert Solution & Answer

Explanation of Solution

Some financial instruments are meant for managing risk in the financial markets. These financial instruments exist to safeguard against the risk created by other financial instruments. Some examples of such financial instruments are forward contracts, interest rate swaps, futures, and options. These financial instruments derive the values from the future value of underlying security or index. Hence, some financial instruments are called as derivatives.

Conclusion

Since some financial instruments derive the values from the future value of underlying security or index, they are called as derivatives.

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Answer 5

Chapter A, Problem A.1Q

To determine

Financial instrument: A financial instrument can be cash, or a share of ownership (stock investments), or a contractual obligation to deliver (accounts payable) or receive cash (accounts receivable), or a contractual obligation to exchange financial instruments (like stock options).

To explain: The reason for financial instruments being called as derivatives

Expert Solution & Answer

Explanation of Solution

Some financial instruments are meant for managing risk in the financial markets. These financial instruments exist to safeguard against the risk created by other financial instruments. Some examples of such financial instruments are forward contracts, interest rate swaps, futures, and options. These financial instruments derive the values from the future value of underlying security or index. Hence, some financial instruments are called as derivatives.

Conclusion

Since some financial instruments derive the values from the future value of underlying security or index, they are called as derivatives.

Answer 6

Chapter A, Problem A.1Q

To determine

Financial instrument: A financial instrument can be cash, or a share of ownership (stock investments), or a contractual obligation to deliver (accounts payable) or receive cash (accounts receivable), or a contractual obligation to exchange financial instruments (like stock options).

To explain: The reason for financial instruments being called as derivatives

Expert Solution & Answer

Explanation of Solution

Some financial instruments are meant for managing risk in the financial markets. These financial instruments exist to safeguard against the risk created by other financial instruments. Some examples of such financial instruments are forward contracts, interest rate swaps, futures, and options. These financial instruments derive the values from the future value of underlying security or index. Hence, some financial instruments are called as derivatives.

Conclusion

Since some financial instruments derive the values from the future value of underlying security or index, they are called as derivatives.

Answer 7

Chapter A, Problem A.1Q

To determine

Financial instrument: A financial instrument can be cash, or a share of ownership (stock investments), or a contractual obligation to deliver (accounts payable) or receive cash (accounts receivable), or a contractual obligation to exchange financial instruments (like stock options).

To explain: The reason for financial instruments being called as derivatives

Answer 8

Expert Solution & Answer

Explanation of Solution

Some financial instruments are meant for managing risk in the financial markets. These financial instruments exist to safeguard against the risk created by other financial instruments. Some examples of such financial instruments are forward contracts, interest rate swaps, futures, and options. These financial instruments derive the values from the future value of underlying security or index. Hence, some financial instruments are called as derivatives.