1. Which one of the following statements concerning financial futures is correct?
A) Speculators in the currency markets are generally firms involved with international trading of goods and services.
B) Portfolio managers wishing to provide downside protection to their portfolios are the primary speculators in the financial futures markets.
C) Investors who simply play in the futures market with the hope of realizing capital gains are referred to as the hedgers.
D) International trade often is accompanied by currency hedging via financial futures.
2. Mayfair Corporation has outstanding 86,000 shares of $1 par value common stock as well as 17,000 shares of 7.5%, $100 par value cumulative preferred stock. At the beginning of the year, the balance in retained earnings was $675,000, and one year's dividends were in arrears. Net income for the current year is $470,000. Compute the balance in retained earnings at the end of the year if Mayfair Corporation pays a dividend of $2.7 per share on its common stock this year.
$912,800.
$359,700.
$1,017,500.
$657,800.