Hedge against the risk of uncertain purchase price

Assignment Help Finance Basics
Reference no: EM132541029

To hedge against the risk of an uncertain purchase price, investors could construct a short hedge using futures contract. Is the above statement true or false?

The statement is false but i don't understand the reasoning behind it?

Reference no: EM132541029

Questions Cloud

Planning to go to uh starting : Today, you graduated from high school. You are planning to go to UH starting 2 years from now after volunteering abroad.
What tools from management accounting may be needed : What tools from management accounting may be needed to understand, analyze and evaluate a company's performance as a company manager
What are the pros and cons of your proposed strategy : Select an existing business in the United States. Take this same business into another market of the country you selected. Propose an appropriate entry strategy
Discuss which material variance is calculated : Discuss which Material Variance (Quantity or Price) is calculated first and why is there a specific order in which these calculations are made.
Hedge against the risk of uncertain purchase price : To hedge against the risk of an uncertain purchase price, investors could construct a short hedge using futures contract. Is the above statement true or false?
Define function of management that is needed for opportunity : Working in business management means taking on responsibility to lead your organization in a variety of situations. Part of that responsibility is understanding
What is medex current share per price : If the required return is 12.5 percent, what is Medex's current share per price?
How might the use of debt be more attractive than equity : How let's further our understanding of how companies finance their investment decisions. Please read the following Annual report from Microsoft
Describe the disease that afflicts your patient : Describe the disease that afflicts your patient. Based on the disease and stage it presents in your patient, what level (primary, secondary, or tertiary).

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd