What are derivatives? Why can they be especially high-risk securities?
Question:
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 80% (10 reviews)
Derivatives are defined as securities whose value depends upon is der...View the full answer
Answered By
Anurag Agrawal
I am a highly enthusiastic person who likes to explain concepts in simplified language. Be it in my job role as a manager of 4 people or when I used to take classes for specially able kids at our university. I did this continuously for 3 years and my god, that was so fulfilling. Sometimes I've skipped my own classes just to teach these kids and help them get their fair share of opportunities, which they would have missed out on. This was the key driver for me during that time. But since I've joined my job I wasn't able to make time for my passion of teaching due to hectic schedules. But now I've made a commitment to teach for at least an hour a day.
I am highly proficient in school level math and science and reasonably good for college level. In addition to this I am especially interested in courses related to finance and economics. In quest to learn I recently gave the CFA level 1 in Dec 19, hopefully I'll clear it. Finger's crossed :)
4.80+
2+ Reviews
10+ Question Solved
Related Book For
Government and Not for Profit Accounting Concepts and Practices
ISBN: 978-1118155974
6th edition
Authors: Michael H. Granof, Saleha B. Khumawala
Question Posted:
Students also viewed these Accounting questions
-
What are derivatives? Why may they be especially high-risk securities?
-
Why are global dimensions of securities law especially important?
-
What are derivatives? How can derivatives be used to reduce risk? Can derivatives be used to increase risk? Explain.
-
List three factors that help to determine store image?
-
a. Find the mean and standard deviation of the sanitation scores. b. Calculate the intervals s, 2s, 3s. c. Find the percentage of measurements in the data set that fall within each of the...
-
Godfreid Company has accounts receivable of $95,400 at March 31, 2017. Credit terms are 2/10, n/30. At March 31, 2017, there is a $2,100 credit balance in Allowance for Doubtful Accounts prior to...
-
A 0.10-m-diameter circular cylinder moves through air with a speed \(U\). The pressure distribution on the cylinder's surface is approximated by the three straight-line segments shown in Fig. P9.8....
-
Walden Green Company purchased land containing an estimated 4,000,000 tons of ore for $16,000,000. The land will be worth $2,400,000 without the ore after 8 years of active mining. Although the...
-
Oscar Selgado, one of the most prolific defence attorneys in Belize, found himself in an unusual position when he appeared yesterday before Justice Nigel Pilgrim. Selgado's role was reversed. He was...
-
Toronto Cricket Property Inc. (TPI) has been incorporated with the purpose of build and operate a world-class cricket stadium outside Toronto. The land on which the stadium will be build is currently...
-
What are the differences between market risk, credit risk, and legal risk? Suppose that a local government invests in 20-year U.S. government bonds. Assess each of the three risks and discuss the...
-
How can governments use derivatives as a means of reducing investment or borrowing risks?
-
Describe the three approaches to performance feedback interviews.
-
Compared to the provision for income taxes in 2007, the companys cash tax payments were: A. lower. B. higher. C. the same. The tax effects of temporary differences that give rise to deferred tax...
-
An adjustment to Kensingtons statement of cash flows to reclassify the companys excess contribution for 2010 would most likely entail reclassifying 210 million (excluding income tax effects) as an...
-
If the valuation allowance had been the same in 2007 as it was in 2006, the company would have reported $115 higher : A. net income. B. deferred tax assets. C. income tax expense. The tax effects of...
-
When certain expenditures result in tax credits that directly reduce taxes, the company will most likely record: A. a deferred tax asset. B. a deferred tax liability. C. no deferred tax asset or...
-
Compared to the assumptions Stereo Warehouse used to compute its periodic pension cost in 2008, earnings in 2009 were most favorably affected by the change in the: A. discount rate. B. estimated...
-
Consider the Brownian process with drift defined by where Z(t) is the standard Brownian process, find E[X(t)|X(t 0 )], var(X(t)| X(t 0 )) and cov(X(t 1 ), X(t 2 )). X(t)= ut +oZ(t), X(0) = 0,
-
Why are stocks usually more risky than bonds?
-
Briefly describe the following types of debt: a. Term loan b. Bond c. Mortgage bond d. Senior debt; junior debt e. Debenture f. Municipal bond
-
The following comments were made at an Annual Conference of the Financial Executives Institute (FEI). There is an irreversible movement towards the harmonization of financial reporting throughout the...
-
The following comments were made at an Annual Conference of the Financial Executives Institute (FEI). There is an irreversible movement towards the harmonization of financial reporting throughout the...
-
As a newly enrolled accounting major, you are anxious to better understand accounting institutions and sources of accounting literature. As a first step, you decide to explore the FASBs Statement of...
-
If you were to enter the banking industry, you might find yourself approving or not approving loans. The following is a good example of a common event you could encounter. Company X is looking for...
-
You see a two year bond with annual coupon rate of 8% that has these flows. Years ahead Cashflows 0 ?? 0.25 0 0.5 0 0.75 1 1.25 1.5 1.75 2 8 0 0 0 108 You will be asked to calculate its price at...
-
Use synthetic division and the Remainder Theorem to evaluate P(c). P(x) = 6x + 5x +9, c = 11/1 P(1) =
Study smarter with the SolutionInn App