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NEW QUESTION: 1
The stock of Southwest Airlines (LUV) is selling for $11.77 in mid-September. An October put on the stock is selling for $1.45 and gives the owner the right to sell the stock for $13.00 prior to its expiration. In this example, the option premium is:
A. $1.23.
B. $11.77.
C. $13.00.
D. $1.45.
Answer: D
Explanation:
Explanation/Reference:
Explanation: The option premium is $1.45, the cost of the option.

NEW QUESTION: 2
Gary Smith, CFA, has been hired lo analyze a specialty tool and machinery manufacturer, Whitmore Corporation (WMC). WMC is a leading producer of specialty machinery in the United States. At the end of
2006, WMC purchased York Tool Company (YTC), an Australian firm in a similar line of business. YTC has partially integrated its marketing functions within WMC but still maintains control of its operations and secures its own financing. Following is a summary of the income statement and balance sheet for YTC (in millions of Australian dollars - AUD) for the past three years as well as exchange rate data over the same period.

Smith has discovered that WMC has a small subsidiary in Ukraine. The Subsidiary follows IAS accounting rules and uses FIFO inventory accounting. The Ukrainian subsidiary was acquired ten years ago and has been fully integrated into WMC's operations. WMC obtains funding for the subsidiary whenever the company finds profitable investments within Ukraine or surrounding countries. According to forecasts from economists, the Ukrainian currency is expected to depreciate relative to the U.S. dollar over the next few years. Local currency prices are forecasted to remain stable, however.
One of the managers at WMC asks Smith to analyze a third subsidiary located in India. The manager has explained that real interest rates in India over the last three years have been 2.00%, 2.50%, and 3.00%, respectively, while nominal interest rates have been 34.64%, 29.15%, and 25.66%, respectively. Smith requests more time to analyze the Indian subsidiary.
If WMC uses the temporal method, YTC's net monetary liabilities leave WMC exposed to loss in the event of:
A. currency (AUD) appreciation.
B. currency (AUD) depreciation.
C. either currency depreciation or currency appreciation.
Answer: A
Explanation:
Explanation/Reference:
Explanation:
Under che temporal method, the nonmonetary assets and liabilities are remeasured at historical rates.
Thus, only the monetary assets and liabilities are exposed to changing exchange rates. Therefore, under the temporal method, exposure is defined as the subsidiary's net monetary asset or net monetary liability position. A firm has net monetary assets if its monetary assets exceed its monetary liabilities. If the monetary liabilities exceed the monetary assets, the firm has a net monetary liability exposure.
Since very few assets are considered to be monetary (mainly cash and receivables), most firms have net monetary liability exposures. If the parent has a net monetary liability exposure when the foreign currency (AUD) is appreciating, the result is a loss. Conversely, a net monetary liability exposure coupled with a depreciating currency will result in a gain. (Study Session 6, LOS 23-c)

NEW QUESTION: 3
You have the application architecture shown in the following exhibit.

Use the drop-down menus to select choice that completes each statement based on the information presented in the graphic.
NOTE: Each correct selection is worth one point.

Answer:
Explanation:

Explanation

References:
https://docs.microsoft.com/en-us/azure/traffic-manager/traffic-manager-routing-methods
https://docs.microsoft.com/en-us/azure/traffic-manager/traffic-manager-monitoring

NEW QUESTION: 4
Which BEST describes a 'reduce' response to a risk?
A. Take a chance
B. Share the pain
C. Remove the cause
D. Lessen the impact
Answer: D