Analysis of pro forma financial statements
What are the actions to be taken when the analysis of pro forma financial statements shows positive trends or Negative trends?
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While analyzing the pro forma statements, a manager tries to see signs of rising positive or negative conditions. And if the forecaster discovers positive signs, then they would advise that the present plans should be continued. If the forecaster discovers negative signs, they will suggest corrective action.
State the term Option Adjusted Spread? Answer: The OAS stands for Option Adjusted Spread is the constant spread added to a forward or a yield curve to match the mark
How does depreciation help in finding out the incremental cash flows?
What is Delta Hedging?
Mr. James K. Silber, an avid international investor, sold a share of Rhone-Poulenc only, a French firm, for FF42. The share was bought for FF42 year ago. The exchange rate is FF6.15 per U.S. dollar and was FF6.65 per dollar a year ago. Mr. Silber acquired FF4
Explain drawbacks of Brownian motion.
Presently, the spot exchange rate is $1.50/£ and the three-month forward exchange rate is $1.52/£. The interest rate of three month is equal to 8.0% per annum in the U.S. & 5.8% per annum in the U.K. One can borrow as much as $1,500,000 o
Define one feature of co-integration for dynamic relationship?
A bank sells a $3,000,000 FRA for a three-month period beginning three months from today and ending six months from today. The purpose of the FRA is to cover the interest rate risk caused by the maturity mismatch from having made a three-month Eurodollar loan and having accepted a six-month Eurodol
Explain the term Modigliani–Modigliani measure.
Explain the commonsense criteria that of a measure of risk.
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