Difference between financial risk and business risk
Explain in brief the difference between financial risk and business risk?
Expert
a) Business risk symbolizes to the insecurity that a company has related to its earnings before interest and taxes or EBIT (also known as operating income). Business risk is intensified by the presence of fixed operating costs and brought on by sales volatility. b) The additional volatility of net income which is there because of the presence of interest expense is financial risk. There are firms which have no financial risk but have only equity financing. As they don’t have debt on which they can make fixed interest payments. On the other hand, firms that work mainly on borrowed money are more exposed to a high degree of financial risk.
Given: price of Nokia shares on the Helsinki stock exchange=12 euros, exchange rate=$1.3/euro, price of the ADR on the NYSE=$15 and each foreign share translates into 1 ADR. Show the actions you would take to make risk free arbitrage profits.
Explain an example of Margin Hedging in Metallgesellschaft and Long Term Capital Management.
what are the factors responsible for the recent surge in international portfolio investment
Explain the government requirements that are imposed on public corporations but not on a private and closely held corporation?
Assume you are a euro-based investor who just sold Microsoft shares which you had bought six months ago. You had invested 10,000 euros to purchase Microsoft shares for $120 per share; the exchange rate was $1.15 per euro. You sold the stock for $135 per share
Explain the term TGARCH as of the GARCH’s family. Answer: TGARCH: It is threshold GARCH. This is the same
Why do Quants like Closed-Form Solutions?
What are possible ways of marking exotic or over-the-counter contracts?
Explain relationship between advanced probability theory and option prices theory.
What are the time dimensions of the balance sheet, the income statement and the statement of cash flows?
18,76,764
1950702 Asked
3,689
Active Tutors
1461531
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!