Types of instruments used by managers to manage risk
Question: Discuss the types of instruments that a finance manager can use to address manage risk. Explain when each instrument should be used.
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Q1) What is the alpha of the two funds? Q2) What is the standard deviation of the two funds?
a. What is the free cash flow to equity for this project? b. What is the NPV computed using the FTE method?
Calculate the effective rate for both loan scenarios. Consider fees to be the equivalent of "other interest".
Currency exchange rates are affected by many factors. Determine the effect of the following factors on the rate of currency exchange between 2 countries:
Determine the expected return using these two methods for the three stocks below using the Capital Asset Pricing Model (CAPM)
Assume you sell for $100,000 a 10 percent ownership stake in a future payment one year from now of $1.5 million.
Create a budget and financial overview for your global venture. Prepare financial analysis in terms of currency risk management-financing of global operation.
Show what the optimum quantity of output/sales is for the subsidiary, and what the optimum (U.S. dollar equivalent) price is.
Q1. What currency risks does Huaneng face? Q2. Do its lenders face any currency risks? Explain.
With the information you now have, use the CAPM to calculate IBM's required rate of return or ks.
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