In a CDS with a notional principal of $100 million the reference entity defaults. What is the payoff to the buyer of protection when the recovery rate is 30%?
A. $100 million
B. $30 million
C. $130 million
D. $70 million
D
The payoff is the notional principal times one minus the recovery. In this case this is 100×(1−0.3) or $70 million.
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Alpine, Inc. sells a single product. The following information relates to the year just ended:Number of units sold: 40,000Variable cost per unit: $200Total fixed cost: $2,400,000Operating income: $3,800,000Required:A. Compute the company's selling price.B. Compute the percentage markup on total cost. Round your answer to two decimal places.C. Assume that Alpine desired to change its practice of computing a markup on total cost to a markup on variable cost. If the company wants to hold selling price constant, would the markup percentage increase or decrease? By how much?
What will be an ideal response?
Given a payoff table in a decision making under risk scenario, what value is derived from applying the following decision rule?
Apply all four criteria presented in your book and choose the alternative that is selected more frequently than the others.
Kapanga Manufacturing Corporation uses a job-order costing system and started the month of October with a zero balance in its work in process and finished goods inventory accounts. During October, Kapanga worked on three jobs and incurred the following direct costs on those jobs: Job B18Job B19Job C11Direct materials$12,000 $25,000 $18,000 Direct labor$8,000 $10,000 $5,000 Kapanga applies manufacturing overhead at a rate of 150% of direct labor cost. During October, Kapanga completed Jobs B18 and B19 and sold Job B19. How much is Kapanga's work in process inventory balance at the end of October?
A. $32,000 B. $23,000 C. $43,000 D. $30,500
Cash advances on credit cards normally cost you interest from the date of the advance and also a transaction fee of 1 to 2 %
Indicate whether the statement is true or false.