What is the difference between speculation and hedging

Assignment Help Finance Basics
Reference no: EM13332895

What is the difference between speculation and hedging? Why do business managers use hedging strategies? Des hedging reduce company risk? How?

Reference no: EM13332895

Questions Cloud

How is equilibrium achieved in this economy : Using the Keynesian cross model, draw a graph to illustrate and explain what will happen in an economy when planned aggregate expenditures are greater than real GDP (i.e., A.E. > Y). How is equilibrium achieved in this economy?
Explain only london dispersion forces must be overcome : Choose the selection which correctly identifies the forces which must be overcome to convert NH3 from a liquid to a gas. a) Only London dispersion forces must be overcome. b) Only dipole-dipole forces must be overcome
What is difference between the spot and the forward markets : What is the difference between the spot and the forward markets. Why do investors or business managers need the forward markets.
What is the person expected utility : A person has an expected utility function of the form U(w)=w^1/2.He has an initial wealth of $25.He also has a lottery ticket that will be worth $75 with probability 1/2 and will be worth $0 with probability 1/2.
What is the difference between speculation and hedging : What is the difference between speculation and hedging. Why do business managers use hedging strategies. Des hedging reduce company risk How
Determine the charge on each ball : Two identical, small insulating balls are suspended by separate 0.23-m threads that are attached to a common point on the ceiling. Determine the charge on each ball
How will the ppaca affect prescription drug costs : the government could take to encourage companies to conduct research and development and still control the costs of pharmaceuticals? How is it done in other nations
Explain heat capacity change with temperature : Assuming that neither the density of water nor its specific heat capacity change with temperature, calculate the total heat capacity of the calorimeter. (density of water = 1.00 g/ mL , specific heat capacity = 4.18 J g-1 K-1)
Lets discuss in depth and with data : Are there measures that the government could take to encourage companies to conduct research and development and still control the costs of pharmaceuticals? How is it done in other nations?

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the current value of one contract in dollars

The June Treasury bond futures contract has a quoted price of 102'12. What is the current value of one contract in dollars?

  What is the invoice price of the bond

A coupon bond paying semiannual interest is reported as having an ask price of 126% of its $1,000 par value. If the last interest payment was made one month ago and the coupon rate is 6%, what is the invoice price of the bond?

  Differentiate direct and indirect methods of intervention

Differentiate between direct and indirect methods of intervention. Address the tools used by governments to impact exchange rates and how political factors impact these decisions.

  Determine the liquidity premium for the corporate bond

A ten-year U.S. Treasury bond has a 3.5 percent interest rate, while an identical maturity corporate bond has a 5.25 percent interest rate.

  What is the maximum annual lease wolfson

What is the maximum annual lease Wolfson would be willing to pay? (Enter your answer in dollars, not millions of dollars, i.e. 1,234,567. Do not round intermediate calculations and round your answer to the nearest whole dollar amount.

  The fourth period the asset disappears

In the fourth period, if the asset survives, you will be 10. the fourth period the asset disappears. The interest rate between periods is 0 percent. How much is your asset worth today ?

  Compute the present value of this stream of income

Now compute the present value of the income stream from the gold mine at a discount rate of 6%, and at a discount rate of 4%.

  Which one of these statements related to growing annuities

Which one of these statements related to growing annuities and perpetuities is correct?

  Determine the sustainable growth rate

Determine the sustainable growth rate of a firm with the following selected financial results?

  Explain the process to calculate external funding needs

Explain the process to calculate external funding needs and the importance to a business.

  Find macaulay duration and modified duration

Find the duration of a bond with settlement date May 27, 2012, and maturity date November 15, 2021. The coupon rate of the bond is 7%, and the bond pays coupons semiannually. The bond is selling at a yield to maturity of 8%. Find Macaulay duration..

  How might advantage home health formulate a prestige pricing

How might Advantage Home Health formulate a prestige pricing strategy and a price bundling strategy targeted to customers who do not have an insurance plan?

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