A company has a $36 million portfolio with a beta of 1.2 . The futures price for a contract on an index is 900 . Futures contracts on $250 times the index can be traded. What trade is necessary to increase beta to 1.8?
A. Long 192 contracts
B. Short 192 contracts
C. Long 96 contracts
D. Short 96 contracts
C
To increase beta by 0.6 we need to go long 0.6×36,000,000/(900×250) or 96 contracts
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Tropical Co declared a cash dividend of $30,000 . The entry includes a(n)
a. decrease to Cash of $30,000. b. increase to Retained Earnings of $30,000. c. decrease to Retained Earnings of $30,000. d. decrease to Cash Dividend Payable of $30,000.
One of the benefits of establishing a formal credit policy for granting credit is that management is freed from the burden of monitoring accounts receivable
a. True b. False Indicate whether the statement is true or false
Working capital turnover ratio indicates:
a. the difference between current assets (excluding inventory) and current liabilities. b. the amount of working capital used in generating sales for the period. c. the bare minimum working capital that a company should have at any time. d. the amount of working capital used as a percentage of the assets owned by the company
Answer the following statements true (T) or false (F)
The lower-of-cost or market valuation of inventories is an example of the disclosure principle.