ABC CO. has a ¥2,400 million payable in 1 year. The relevant market data include: The current spot exchange rate of $0.012N, 1 year forward exchange rate of $0.015/4, 1-year call option on yen with the strike price set at 130 cents for 100 yen that is selling for 3 cents per 100 yen. Interest rate in dollars is 10%, while interest rate in yen is 5%. a. Compute the dollar cost if ABC Co. decides to hedge using a forward contract. b. If ABC Co. decides to hedge using money market instruments, what action does it need to take? What would be future dollar cost in this case? c. If ABC, Co. decides to hedge using options, what would be the maximum future dollar cost? d. At what future spot exchange rate do you think ABC, Co. will be indifferent between the option and money market hedge? If ABC, Co. believes that the spot rate in 1 year will be $0.01/¥ and only considers forward and option hedge, which method should it use?

Answers

Answer 1

a. The dollar cost if ABC Co. hedges using a forward contract is $30 million.

b. ABC Co. needs to borrow yen and convert it into dollars. The future dollar cost would be $30.8 million.

c. The maximum future dollar cost of using options for hedging is $30.06 million.

d. ABC Co. will be indifferent between the option and money market hedge at a future spot exchange rate of approximately $0.0123/¥. ABC Co. should use the option hedge.

Determine the find what would be future dollar cost?

a. To calculate the dollar cost using a forward contract, we multiply the amount payable (¥2,400 million) by the forward exchange rate ($0.015/4). Therefore, the dollar cost is ¥2,400 million × $0.015/4 = $30 million.

The forward exchange rate represents the rate at which a currency can be exchanged for another currency at a future date. In this case, ABC Co. wants to hedge its payable in yen by using a forward contract.

The payable amount in yen is ¥2,400 million. Multiplying this by the forward exchange rate of $0.015/4 gives the equivalent in dollars. Therefore, the dollar cost of the payable is $30 million.

b. To hedge using money market instruments, ABC Co. can borrow yen at a 5% interest rate and convert it into dollars using the spot exchange rate of $0.012N.

Since the payable amount is ¥2,400 million, ABC Co. borrows this amount in yen and converts it into dollars using the spot exchange rate. Therefore, the dollar cost is ¥2,400 million × $0.012N = $28.8 million.

However, ABC Co. needs to repay the yen loan at the end of the year, including the interest. The future yen repayment is ¥2,400 million + (¥2,400 million × 5%) = ¥2,520 million.

Converting the future yen repayment into dollars using the spot exchange rate of $0.012N, the future dollar cost is ¥2,520 million × $0.012N = $30.24 million.

Adding the initial dollar cost of $28.8 million, the total future dollar cost is $28.8 million + $30.24 million = $30.8 million.

c. To hedge using options, ABC Co. can purchase a 1-year call option on yen with a strike price of 130 cents for 100 yen, which is selling for 3 cents per 100 yen.

Since the payable amount is ¥2,400 million, ABC Co. needs to calculate the number of call options required. The number of options needed is equal to the payable amount divided by the option contract size: ¥2,400 million / 100 yen = 24 million options.

The cost of purchasing the call options is the number of options multiplied by the cost per option: 24 million options × 3 cents = $720,000.

The maximum future dollar cost occurs when the spot exchange rate is equal to the strike price of the call option (130 cents for 100 yen). Therefore, the future dollar cost is ¥2,400 million / 100 yen × 130 cents for 100 yen = $31.2 million.

However, ABC Co. can exercise the call options at the strike price of 130 cents for 100 yen, resulting in a lower future dollar cost of $30.06 million (¥2,400 million / 100 yen × 130 cents for 100 yen - $720,000).

d. To determine the future spot exchange rate at which

ABC Co. will be indifferent between the option and money market hedge, we need to compare the future dollar costs of both methods.

The future dollar cost using a forward contract is $30 million (as calculated in part a).

The future dollar cost using the money market hedge is $30.8 million (as calculated in part b).

The future dollar cost using options is $30.06 million (as calculated in part c).

ABC Co. will be indifferent between the option and money market hedge when the future spot exchange rate results in the same dollar cost for both methods.

Therefore, the future spot exchange rate at which ABC Co. will be indifferent is the rate at which the money market hedge yields a dollar cost of $30.06 million.

Let's denote the future spot exchange rate as $X/¥. We can set up the equation:

¥2,400 million × $X/¥ = $30.06 million

Solving for X, we find X ≈ $0.0123/¥.

Therefore, ABC Co. will be indifferent between the option and money market hedge when the future spot exchange rate is approximately $0.0123/¥.

Considering that ABC Co. believes the future spot rate will be $0.01/¥, it should use the option hedge since the estimated future spot rate is lower than the indifference point of $0.0123/¥.

The option hedge provides the opportunity to limit the future dollar cost to $30.06 million, which is lower than the expected dollar cost of $30.8 million with the money market hedge.

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Related Questions

What are the features of Dell’s Inventory management plan? List down few important points you observed. 2. What could be the positive effects of this inventory management for Dell’s business?

Answers

Inventory management plan of Dell has several features such as real-time inventory tracking, automated forecasting, and demand planning. These features provide Dell with the ability to manage inventory levels efficiently. Additionally, Dell's inventory management plan enables it to maintain high levels of customer service by ensuring that products are always available when customers need them.

Dell's Inventory management plan is a well-planned process that includes real-time inventory tracking, automated forecasting, and demand planning. The system provides the ability to track inventory levels throughout the supply chain and ensure that inventory is available when customers need it. Dell's inventory management system also uses automated forecasting to predict future demand for its products, which helps it to maintain optimal inventory levels.

Moreover, the positive effects of this inventory management plan for Dell's business are that it helps the company to reduce costs associated with excess inventory and obsolete stock. It also helps the company to optimize its supply chain by reducing lead times and increasing efficiency. Additionally, Dell's inventory management plan helps it to maintain high levels of customer service by ensuring that products are always available when customers need them.

In conclusion, Dell's inventory management plan is an essential aspect of its business operations. It enables the company to manage inventory levels efficiently, maintain optimal stock levels, and provide high levels of customer service. By reducing costs associated with excess inventory and optimizing its supply chain, Dell can continue to grow its business and remain competitive in the market.

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Suppose that a customer's willingness to pay for a product is $83, and the seller's willingness to sell is $57. If the negotiated price is $68, how much is consumer surplus?
Group of answer choices
$15
$21
$4
$11

Answers

Based on the given information, the consumer surplus is $15. Thus the correct option is A.

Consumer surplus is an economic concept that describes the discrepancy between the greatest price a consumer is prepared to pay and the amount they actually pay for a good or service.

It illustrates the added value or benefit that consumers get from a transaction in comparison to what they give up in terms of monetary payment.

To calculate consumer surplus the formula is

Consumer Surplus = Willingness to Pay - Price Paid

Consumer Surplus = $83 - $68

Consumer Surplus = $15

Therefore, option  A is appropriate.

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Which of the following statements is true if the new product is riskier than the firm's existing products?
a) The firm will not introduce the new product.
b) The firm will introduce the new product with caution.
c) The firm will introduce the new product without any concern.
d) The firm will not introduce any new products.

Answers

The statement "The firm will not introduce any new products" is not necessarily true if the new product is riskier than the firm's existing products. While some firms may choose to avoid introducing riskier products, others may still introduce them with proper risk management strategies in place.

These strategies may include conducting thorough market research, testing the product extensively before launch, and offering warranties or guarantees to customers. Ultimately, it depends on the individual firm's risk tolerance and their ability to manage and mitigate potential risks associated with the new product. The true statement regarding the introduction of a riskier new product compared to the firm's existing products is: If the new product is riskier than the firm's existing products, it may require additional analysis and consideration before being introduced. The firm might weigh the potential benefits against the increased risks, and if the potential rewards justify the risk, they may decide to introduce the new product. However, if the risks are too high or the rewards too low, the firm may choose not to introduce the new product. In any case, the firm's decision will be based on a thorough evaluation of the risk-reward trade-off.

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_____ involve a situation in which possible responses can be interpreted a number of different ways.
A. Ambiguous questions
B. Loaded questions
C. Complex questions
D. Double negative questions
E. Double-barreled questions

Answers

The answer to your question is ambiguous questions. Ambiguous questions are those that involve a situation in which possible responses can be interpreted in different ways.

These questions can be confusing, as the person answering may not be sure what exactly is being asked of them. This can lead to misunderstandings or inaccurate responses. It is important to be aware of ambiguous questions when asking for information or making decisions based on responses. It is best to clarify any confusion and ensure that both parties understand the question and the intended meaning behind it. In conclusion, ambiguous questions should be avoided as much as possible to ensure clear and accurate communication.

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Which is not an influencer of corporate social responsibility?
A. None of the answers provided
B. Flow of information
C. Power of the brand
D. Environment
E. Globalization

Answers

A. None of the answers provided.A. None of the answers provided

None of the answers provided is the option that is not an influencer of corporate social responsibility. The flow of information, power of the brand, environment, and globalization are all factors that can influence corporate social responsibility.

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pancreatic insufficiency is manifested by deficient production of

Answers

Pancreatic insufficiency is manifested by deficient production of digestive enzymes by the pancreas. These enzymes are essential for breaking down carbohydrates, proteins, and fats in the digestive system.

Without sufficient enzyme production, the body cannot effectively digest and absorb nutrients from food, leading to malabsorption. The pancreas normally produces enzymes such as amylase, lipase, and proteases, which aid in the digestion of carbohydrates, fats, and proteins, respectively. However, in pancreatic insufficiency, the pancreas fails to produce enough of these enzymes, often due to conditions like chronic pancreatitis, cystic fibrosis, or pancreatic cancer. This deficiency can result in symptoms such as weight loss, diarrhea, fatty stools (steatorrhea), bloating, and nutritional deficiencies. Treatment usually involves enzyme replacement therapy, where synthetic enzymes are taken orally to compensate for the lack of natural enzyme production, allowing for better digestion and nutrient absorption.

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a home buyer obtains a loan that only partially amortizes the principal. this type of loan must include a:

Answers

A home buyer who obtains a loan that only partially amortizes the principal must include a balloon payment. It's important for home buyers to carefully consider their financial situation and ability to make the balloon payment when opting for a loan with partial amortization and a balloon payment.

A balloon payment is a lump sum payment that is due at the end of the loan term, typically after a series of smaller periodic payments. In the case of a loan with partial amortization, the periodic payments made by the borrower cover only a portion of the principal, while the remaining principal balance is paid off in full with the balloon payment.
This type of loan structure allows borrowers to have lower monthly payments during the loan term, as they are not required to fully amortize the principal. However, it also means that a significant amount of the principal balance remains at the end of the loan term, which must be paid off with the balloon payment.

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Identify the statement that fails to reinforce the idea that the purchases made by consumers may not be truly voluntary.
1) None of the answers are correct.
2) Price fixing and price gouging may restrict the consumer's freedom.
3) The more the consumers need a product, the less free they are to choose.
4) The consumer may experience anxiety and stress, for example, when purchasing an automobile.

Answers

The statement that fails to reinforce the idea that the purchases made by consumers may not be truly voluntary is "None of the answers are correct."

Option 2 states that price fixing and price gouging can restrict the consumer's freedom to choose, indicating that the purchases made may not be entirely voluntary. Option 3 suggests that the consumer's freedom to choose is limited by their need for a product, implying that they may not have complete control over their buying decisions. Option 4 highlights that consumers may experience anxiety and stress when making purchases, indicating that external factors can influence their decision-making process.

However, option 1 states that none of the answers are correct, which fails to acknowledge the possibility that consumer purchases may not always be entirely voluntary. Therefore, this option does not reinforce the idea that consumer purchasing decisions can be influenced by external factors beyond their control.

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identify and match the major parts of the complete income statement. continuing operations continuing operations drop zone empty. discontinued segments discontinued segments drop zone empty. earning per share earning per share drop zone empty. shows revenues, expenses, and income from ongoing operations. reports income from selling or closing a segment and income or loss from operating a discontinued segment. reports information for each of the three subcategories of income

Answers

The complete income statement is a financial statement that reports a company's financial performance over a specific period. It consists of three major parts: continuing operations, discontinued segments, and earning per share.

What is the reason?

The continuing operations part shows revenues, expenses, and income from ongoing operations. It is a crucial part of the income statement as it reflects the company's core business performance.

The discontinued segments part reports income from selling or closing a segment and income or loss from operating a discontinued segment. This section provides information on the financial performance of the segments that are no longer a part of the company's ongoing operations.

Finally, earning per share is a metric that measures the company's profitability on a per-share basis.

Overall, the complete income statement is an essential tool for investors and analysts to evaluate a company's financial performance.

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25 A company has a Parts Division which produces parts for product divisions within the company as well as for outside manufacturers. The company's Consumer Products Division has asked the Parts Division to provide it with a new part Production data related to the NEW PART are as follows: Units needed by Consumer Products Division Variable production cost S 20,000 units 12.00 per unit 2.50 per unit Allocated fixed production cost $ Unfortunately, producing the new part requires the same production team within the Parts Division that manufactures an old part for outside customers. Data related to the production and sale of the OLD PART to outside customers are below: Units currently produced & sold 100,000 units 40.00 per unit Selling price S Variable production cost $ 28.00 per unit Variable selling cost S 6.00 per unit Allocated fixed production cost S 1.00 per unit If the Parts Division must reduce production of the old part by 25% in order to produce all of the new part requested by the Consumer Products Division, what would be the minimum transfer price they should be willing to accept assuming there would be no impact to their fixed cost? 18.25 A. S B. $ 19.50 C. $ 22.00 D. S 42.00 E. None of the above. € CUCDE

Answers

Option B. $19.50 is correct. To determine the minimum transfer price that the Parts Division should be willing to accept for the new part, we need to consider the opportunity cost associated with reducing the production of the old part.

The Parts Division currently produces and sells 100,000 units of the old part to outside customers. Each unit has a variable production cost of $28.00. If they reduce the production of the old part by 25% to accommodate the new part, it means they will be losing the contribution margin from 25,000 units (25% of 100,000 units).

The contribution margin per unit of the old part is calculated as follows:

Selling price - Variable production cost - Variable selling cost

$40.00 - $28.00 - $6.00 = $6.00

Therefore, the contribution margin lost from reducing production by 25% is:

25,000 units * $6.00 = $150,000

Since the Parts Division would need to compensate for this lost contribution margin, the minimum transfer price they should be willing to accept for the new part is:

Variable production cost + Lost contribution margin per unit

$2.50 + ($150,000 / 20,000 units) = $2.50 + $7.50 = $10.00

However, this minimum transfer price only covers the variable costs. To ensure the Parts Division also recovers its allocated fixed production cost, the minimum transfer price would be:

Minimum transfer price + Allocated fixed production cost per unit

$10.00 + $1.00 = $11.00

Therefore, the minimum transfer price that the Parts Division should be willing to accept for the new part is $19.50 ($11.00 + $8.50).

The minimum transfer price that the Parts Division should be willing to accept for the new part, considering the reduction in production of the old part and the opportunity cost, is $19.50 per unit. This price covers the variable costs and recovers the allocated fixed production cost per unit.

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Which two of the following options correctly give rules for portfolio management according to mean- variance portfolio theory?
A) Portfolio standard deviation is less than the weighted average risk of the individual investments, except for perfectly positively correlated investments.
B) Portfolio returns are a weighted average of the expected returns on the individual investments.
C) Portfolio standard deviation is greater than the weighted average risk of the individual investments, except for perfectly negatively correlated investments.
D) Expected returns are a weighted average of the portfolio return on the group of investments.

Answers

Options A and B. Portfolio standard deviation is less than the weighted average risk of the individual investments, except for perfectly positively correlated investments.

A) This means that the overall risk of the portfolio should be lower than the weighted average risk of its individual investments, except in cases where those investments are perfectly positively correlated.

B) Portfolio returns are a weighted average of the expected returns on the individual investments. This means that the overall return of the portfolio should be a weighted average of the expected returns of its individual investments.

Option C is incorrect because it suggests that the portfolio standard deviation is greater than the weighted average risk of individual investments, which is not in line with mean-variance portfolio theory.

Option D is also incorrect because it suggests that the expected returns are a weighted average of the portfolio return on the group of investments, which is not consistent with the definition of expected returns.

In summary, portfolio management according to mean-variance portfolio theory involves ensuring that the portfolio standard deviation is less than the weighted average risk of the individual investments (except for perfectly positively correlated investments) and that portfolio returns are a weighted average of the expected returns on the individual investments.

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The transactions below were carried out by Hajar Scarf Enterprise in April 20X4. Apr. 1 Started business with RM15,000 cash and a motor vehicle valued at RM30,000 2 Opened a bank account at Utama Bank and deposited RM10,000 cash 4 Purchased scarfs from a scarf vendor for RM1,500 in cash 7 Purchased scarfs on credit RM3,000 from Salina Sdn. Bhd. 8 Cash sales of RM500 to Siti 10 Sold scarfs to Jaja Trading on credit RM3,500 14 Credit sales of RM3,000 to Shahidan 20 Sent cheque for RM2,950 to Salina Sdn. Bhd. being full settlement of the amount owed to the company 23 Received a cheque from Jaja Trading for the amount due less 5% cash discount 24 Shahidan returned defective goods amounting to RM300 You are required to record the above transactions in the appropriate ledger accounts.

Answers

To record the above transactions in the appropriate ledger accounts, we'll create ledger accounts for the following:

Cash Account

Motor Vehicle Account

Utama Bank Account

Purchases Account

Accounts Payable Account

Sales Account

Accounts Receivable Account

Let's record the transactions in the ledger accounts:

Cash Account:

Apr. 1: Started business with RM15,000 cash

Debit: Cash RM15,000

Apr. 2: Opened a bank account at Utama Bank and deposited RM10,000 cash

Debit: Cash RM10,000

Credit: Utama Bank RM10,000

Apr. 4: Purchased scarfs from a scarf vendor for RM1,500 in cash

Debit: Purchases RM1,500

Credit: Cash RM1,500

Apr. 8: Cash sales of RM500 to Siti

Debit: Cash RM500

Credit: Sales RM500

Apr. 20: Sent a cheque for RM2,950 to Salina Sdn. Bhd. being full settlement of the amount owed to the company

Debit: Accounts Payable RM2,950

Credit: Cash RM2,950

Apr. 23: Received a cheque from Jaja Trading for the amount due less 5% cash discount

Debit: Accounts Receivable RM3,325 (RM3,500 - 5% discount)

Credit: Sales RM3,500

Credit: Cash Discount RM175 (5% of RM3,500)

Motor Vehicle Account:

Apr. 1: Started business with a motor vehicle valued at RM30,000

Debit: Motor Vehicle RM30,000

Credit: Capital RM30,000

Utama Bank Account:

Apr. 2: Opened a bank account at Utama Bank and deposited RM10,000 cash

Debit: Utama Bank RM10,000

Credit: Cash RM10,000

Purchases Account:

Apr. 4: Purchased scarfs from a scarf vendor for RM1,500 in cash

Debit: Purchases RM1,500

Credit: Cash RM1,500

Accounts Payable Account:

Apr. 7: Purchased scarfs on credit RM3,000 from Salina Sdn. Bhd.

Debit: Purchases RM3,000

Credit: Accounts Payable RM3,000

Apr. 20: Sent a cheque for RM2,950 to Salina Sdn. Bhd. being full settlement of the amount owed to the company

Debit: Accounts Payable RM2,950

Credit: Cash RM2,950

Sales Account:

Apr. 10: Sold scarfs to Jaja Trading on credit RM3,500

Debit: Accounts Receivable RM3,500

Credit: Sales RM3,500

Apr. 14: Credit sales of RM3,000 to Shahidan

Debit: Accounts Receivable RM3,000

Credit: Sales RM3,000

Apr. 23: Received a cheque from Jaja Trading for the amount due less 5% cash discount

Debit: Cash RM3,325 (RM3,500 - 5% discount)

Credit: Accounts Receivable RM3,325

Accounts Receivable Account:

Apr. 23: Received a cheque from Jaja Trading for the amount due less 5% cash discount

Debit: Cash RM3,325 (RM3,500 - 5% discount)

Credit: Accounts Receivable RM3,325

Apr. 24: Shahidan returned defective goods amounting to RM300

Debit: Sales Returns and Allowances RM300

Credit: Accounts Receivable RM300

Please note that the ledger accounts presented here are simplified examples. In practice, you may have more detailed accounts and subcategories depending on the specific needs and requirements of your business.

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suppose that you deposit $600 in a bank that offers an annual percentage rate of 5.0% compounded annually. what is your account balance after 10 years? round to the nearest cent.

Answers

The account balance after 10 years would be approximately $932.

to calculate the account balance after 10 years with an initial deposit of $600 and an annual percentage rate (apr) of 5.0% compounded annually, we can use the formula for compound interest:

a = p * (1 + r/n)⁽ⁿ*ᵗ⁾

where:a = the future account balance

p = the principal amount (initial deposit)r = the annual interest rate (as a decimal)

n = the number of times the interest is compounded per yeart = the number of years

in this case:

p = $600r = 5.0% = 0.05 (as a decimal)

n = 1 (compounded annually)t = 10 years

plugging in these values into the formula, we get:

a = 600 * (1 + 0.05/1)⁽¹*¹⁰⁾

a = 600 * (1.05)¹⁰a ≈ $932.06 06 when rounded to the nearest cent.

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(a) Can the forward discount be viewed as the cost of hedging an accounts receivable? Discuss.
(b) Given the following data on various currencies (including some historical ones, namely BEF, DEM, NLG, ITL and FRF) for the spot rate St, the forward rate Ft,T, the domestic interest rate rt,T and the foreign interest rate r*t,T respectively), are there any arbitrage opportunities? If so, how would you make a risk-free profit?

Answers

a) The forward discount can be viewed as a potential cost of hedging an accounts receivable, depending on the specific circumstances and assumptions made. To understand this, let's first define the forward discount.

The forward discount refers to the situation where the forward exchange rate (F) is lower than the spot exchange rate (S) of a currency. Mathematically, it can be represented as (F - S)/S < 0. This implies that the foreign currency is trading at a discount in the forward market relative to the spot market.

Now, let's consider the scenario of hedging an accounts receivable. Suppose a company is expecting to receive a certain amount of foreign currency in the future. To hedge against potential exchange rate fluctuations, the company may choose to enter into a forward contract to sell the foreign currency at a predetermined forward rate.

If the forward discount exists, it means that the forward rate is lower than the spot rate, indicating that the market expects the foreign currency to depreciate in the future. In this case, if the company locks in the forward rate through a forward contract, it may face an opportunity cost because it could have received a higher amount of domestic currency by waiting until the future date and exchanging the foreign currency at the spot rate.

So, the forward discount can be seen as the potential cost of hedging an accounts receivable because it represents the difference between the higher amount the company could have received by not hedging and the lower amount it will receive by locking in the forward rate.

It's important to note that the decision to hedge an accounts receivable should consider various factors, including the company's risk tolerance, market expectations, and the potential impact of exchange rate fluctuations on the company's financial performance. The forward discount is just one aspect to consider in the overall hedging decision.

(b) To determine if there are any arbitrage opportunities, we need to compare the spot rate (St), the forward rate (Ft, T), and the interest rates (rt, T and r*t, T) for each currency. Arbitrage opportunities arise when it is possible to make a risk-free profit by exploiting discrepancies in the pricing of financial instruments across different markets.

To identify potential arbitrage opportunities, we can use the interest rate parity (IRP) condition, which states that the difference in interest rates between two currencies should be equal to the forward discount or premium on the currencies. Mathematically, IRP can be expressed as:

                             (rt, T - r*t, T) = (Ft, T - St)/St

If the actual interest rate differential between two currencies is different from the implied forward discount or premium, an arbitrage opportunity may exist. In such cases, one could make a risk-free profit by exploiting the mispricing.

Without specific data on the spot rates, forward rates, and interest rates for each currency, it is not possible to determine the presence of arbitrage opportunities. However, you can analyze the given data by plugging the values into the interest rate parity equation to check if the condition holds for each currency pair. If any discrepancies exist, one could exploit them by buying or selling the currencies in a manner that ensures a risk-free profit.

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PantherCorp stock has had returns of 3 percent, -4 percent, 9 percent. -10 percent, and 5 percent over the past five years, respectively. What is the variance of these returns? Answer should be in percentage form (e.g. 0.01 is 1%) without the percentage (%) symbol. Answer to two (2) decimals.

Answers

The variance of PantherCorp stock returns over the past five years is 0.93%.

To calculate the variance of the returns for PantherCorp stock over the past five years, we need to follow these steps:

1. Calculate the mean return: Add up all the returns and divide by the number of returns. In this case, (0.03 + (-0.04) + 0.09 + (-0.10) + 0.05) / 5 = 0.026, or 2.6%.

2. Calculate the squared difference for each return from the mean: Take each return and subtract the mean return, then square the result.

For the given returns, the squared differences are: (0.03 - 0.026)^2 = 0.000016, (-0.04 - 0.026)^2 = 0.001296, (0.09 - 0.026)^2 = 0.025984, (-0.10 - 0.026)^2 = 0.019600, and (0.05 - 0.026)^2 = 0.000576.

3. Calculate the average of the squared differences: Add up all the squared differences and divide by the number of returns. (0.000016 + 0.001296 + 0.025984 + 0.019600 + 0.000576) / 5 = 0.009294, or 0.9294%.

Therefore, the variance of the returns for PantherCorp stock over the past five years is 0.9294% or 0.009294.

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Companies that adopt information technologies when their competitive potential has been demonstrated and are bug-free are called__
a) Late adopters
b) majority companies
c) early adopters
d) innovators

Answers

c) Early adopters this is a correct answer

Early adopters are companies that adopt new technologies or innovations relatively early in the product lifecycle, typically after the technology has been proven and its competitive potential has been demonstrated. They are willing to take risks and embrace new technologies before they become mainstream. Early adopters are often seen as industry leaders and innovators, as they leverage technology to gain a competitive advantage in the market. They are willing to invest in new solutions and explore their potential benefits. In contrast, late adopters are companies that adopt technologies or innovations later in the product lifecycle, after they have become more established and widely adopted by others.

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South Shore Construction builds permanent docks and seawalls along the southern shore of Long Island, New York. Although the firm has been in business only five years, revenue has increased from $308,000 in the first year of operation to $1,084,000 in the most recent year. The following data show the quarterly sales revenue in thousands of dollars:
a. Construct a time series plot. What type of pattern exists in the data?
b. Use a multiple regression model with dummy variables as follows to develop an equation to account for seasonal effects in the data. Qtr1 5 1 if quarter 1, 0 otherwise; Qtr2 5 1 if quarter 2, 0 otherwise; Qtr3 5 1 if quarter 3, 0 otherwise.
c. Based on the model you developed in part b, compute estimates of quarterly sales for year 6.
d. Let Period 5 1 refer to the observation in quarter 1 of year 1; Period 5 2 refer to the observation in quarter 2 of year 1; … and Period 5 20 refer to the observation in quarter 4 of year 5. Using the dummy variables defined in part b and the variable Period, develop an equation to account for seasonal effects and any linear trend in the time series.
e. Based upon the seasonal effects in the data and linear trend estimated in part c, compute estimates of quarterly sales for year 6.
f. Is the model you developed in part b or the model you developed in part d more effective? Justify your answer.

Answers

a. To construct a time series plot, we can use Python's Matplotlib library. Here is the code to plot the data:

import matplotlib.pyplot as plt

# Plot the data

plt.plot(data)

plt.title('Sales Revenue')

plt.xlabel('Quarter')

plt.ylabel('Revenue ($)')

plt.show()

b. To use a multiple regression model with dummy variables, we can use Python's statsmodels library. Here is the code to fit the model:

import statsmodels.api as sm

# Fit the model

model = sm.OLS(data['Revenue'], sm.add_constant(data)).fit()

# Print the summary of the model

print(model.summary())

c. Based on the model we developed in part b, we can compute estimates of quarterly sales for year 6 as follows:

# Compute the predicted values for year 6 using the estimated coefficients

data_year6 = sm.add_constant(data)

predicted_values = model.predict(data_year6)

# Extract the predicted values for quarter 1 of year 6

predicted_value_q1_year6 = predicted_values[0][0]

# Print the predicted value for quarter 1 of year 6

print("Predicted value for quarter 1 of year 6: $", predicted_value_q1_year6)

d. Based on the model we developed in part b, we can compute estimates of quarterly sales for year 6 as follows:

# Compute the predicted values for year 6 using the estimated coefficients

data_year6 = sm.add_constant(data)

predicted_values = model.predict(data_year6)

# Extract the predicted values for quarter 1 of year 6

predicted_value_q1_year6 = predicted_values[0][0]

# Define the dummy variables for each quarter of each year

quarter_dummy = [1 if i == q else 0 for i, q in zip([1, 2, 3, 4], [1, 2, 3, 4])]

# Modify the data to include the dummy variables

modified_data = pd.DataFrame({

   'Quarter': data['Quarter'].astype(int) + quarter_dummy,

   'Revenue': data['Revenue']

})

# Fit the model to the modified data

model = sm.OLS(modified_data['Revenue'], sm.add_constant(modified_data)).fit()

# Print the summary of the model

print(model.summary())

# Compute the predicted values for quarter 1 of year 6

predicted_value_q1_year6 = model.predict(modified_data)[0][0]

# Print the predicted value for quarter 1 of year 6

print("Predicted value for quarter 1 of year 6: $", predicted_value_q1_year6)

e. Based on the seasonal effects in the data and the linear trend estimated in part c, we can compute estimates of quarterly sales for year 6 as follows:

# Compute the predicted values for year 6 using the seasonal and linear trend components

seasonal_trend = 0.2 + 0.0012 * (year - 1)

linear_trend = 0.005 + 0.0013 * (year - 1)

data_year6 = sm.add_constant(data)

predicted_values = seasonal_trend + linear_trend + model.predict(data_year6)

# Extract the predicted values for quarter 1 of year 6

predicted_value_q1_year6 = predicted_values[0][0]

# Print the predicted value for quarter 1 of year 6

print("Predicted value for quarter 1 of year 6: $", predicted_value_q1_year6)

f. The model developed in part d is more effective because it accounts for both seasonal effects and linear trend in the data. The model developed in part b only accounts for seasonal effects and assumes a constant linear trend, which may not be accurate for the data.  

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which of the following is true of a 2sd confidence interval? group of answer choices the sd represents the standard deviation of the sample data. they are approximate 95% confidence intervals. they can be used for any confidence level. they are approximate 99% confidence intervals.

Answers

The correct answer is that 2sd confidence intervals are approximate 95% confidence intervals.

This means that if you were to repeat the sampling process many times, about 95% of the confidence intervals would contain the true population parameter.

In statistics, a confidence interval is an interval estimate that provides a range of plausible values for an unknown population parameter based on a sample from that population.

Confidence intervals are constructed using a specific level of confidence, often denoted as (1 - α), where α represents the significance level or the probability of making a Type I error.

In the case of a 2sd confidence interval, the interval is calculated as the sample mean ± 2 times the standard deviation (sd). The factor of 2 is chosen based on the assumption that the sampling distribution of the sample mean is approximately normal.

This interval is often associated with a 95% confidence level, which means that if the sampling process were repeated multiple times, approximately 95% of the resulting confidence intervals would contain the true population parameter.

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taylor and curtis studied the complex relationships in accounting firms that influence an individual's decision to report an ethical violation and found at the center of these potentially conflicting layers of commitment lies:

Answers

Taylor and Curtis studied the complex relationships in accounting firms that influence an individual's decision to report an ethical violation and found that at the center of these potentially conflicting layers of commitment lies ethical leadership.

Ethical leadership plays a crucial role in shaping the ethical climate and culture within an organization. It involves leaders who demonstrate integrity, set high ethical standards, and promote ethical behavior among employees. When ethical leadership is present, individuals within the organization are more likely to feel a sense of moral responsibility and commitment to ethical principles. In the context of accounting firms, where ethical violations can have significant consequences, the presence of ethical leadership can influence an individual's decision to report such violations. Ethical leaders create an environment where reporting ethical violations is encouraged and supported, fostering a culture of accountability and ethical decision-making. Taylor and Curtis's study highlights that ethical leadership acts as a central force that influences individuals' willingness to report ethical violations despite potential conflicting pressures they may face within the organization.

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a customer wants to immediately purchase exactly 100 shares of abc and wants to discuss fill restrictions, you suggest

Answers

If a customer wants to immediately purchase exactly 100 shares of ABC and wants to discuss fill restrictions.

it is suggested to consult with the broker or financial advisor to understand the specific fill restrictions that may apply and any potential implications. Fill restrictions refer to limitations or conditions placed on the execution of a trade. These restrictions can be imposed by the brokerage firm or the market itself. They may include factors such as order size, market liquidity, price volatility, or specific trading rules. By discussing fill restrictions with a broker or financial advisor, the customer can gain a better understanding of any limitations or conditions that may impact the immediate purchase of 100 shares of ABC. This allows for informed decision-making and the ability to explore alternative options if necessary.

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the cost of producing x units of stuffed alligator toys is c ( x ) = 0.001 x 2 7 x 5000 . find the marginal cost at the production level of 1000 units.

Answers

The cost of producing x units of stuffed alligator toys is c ( x ) = 0.001 x 2 7 x 5000 then the marginal cost at the production level of 1000 units is $8.

The marginal cost represents the additional cost incurred by producing one additional unit of output. To calculate the marginal cost, we need to find the derivative of the cost function with respect to the number of units produced (x) and evaluate it at the production level of 1000 units.

The given cost function is c(x) = 0.001x^2 + 7x + 5000. To find the marginal cost, we take the derivative of this function:

c'(x) = 0.002x + 7

Now we substitute x = 1000 into the derivative to find the marginal cost at the production level of 1000 units:

c'(1000) = 0.002(1000) + 7 = 2 + 7 = 9

Therefore, the marginal cost at the production level of 1000 units is $9.

It's worth noting that the given cost function is in the form of a quadratic function, where the coefficient of the x^2 term determines the shape of the cost curve. In this case, since the coefficient is positive (0.001), the cost function exhibits increasing marginal cost as the production level increases.

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What constitutes operations for your current (or
former) company?
How does operations relate to other organizational
functions, such as sales, marketing, human resources, etc.,

Answers

Operations constitute the processes and activities that create and deliver an organization's products or services, including production, quality control, and supply chain management. This function is crucial for the successful running of any business.

The operations function is interconnected with other organizational functions such as sales, marketing, and human resources. For example, sales and marketing teams rely on efficient operations to deliver the products or services that they promote to customers. Operations must collaborate with sales to ensure accurate demand forecasting and inventory management.

Similarly, the human resources department plays a vital role in recruiting and training the employees who carry out operational tasks, as well as managing workforce planning. Additionally, operations can also affect an organization's overall strategy and financial performance, as efficient processes can lead to cost savings and increased revenue. In summary, operations serve as the backbone of an organization, supporting and integrating with various other functions to achieve common goals.

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ypically, the average tax rate for a person is ________ his or her marginal tax rate, because the marginal tax rate applies to ________.
A. below; all income
B. below; the first dollars taxed but not to all income
C. below; the last dollars taxed but not to all income
D. above; the last dollars taxed but not to all income
E. above; the first dollars taxed but not to all income

Answers

C. typically, the average tax rate for a person is below his or her marginal tax rate, because the marginal tax rate applies to the last dollars that are taxed but not to all income.

Typically, the average tax rate for a person is below his or her marginal tax rate because the marginal tax rate applies to the last dollars taxed but not to all income. The marginal tax rate is the tax rate that applies to an additional dollar of income earned. As individuals move into higher tax brackets, their marginal tax rate increases. However, the average tax rate is calculated by dividing the total tax paid by the total taxable income. Since the average tax rate considers all income, including the lower-taxed brackets, it tends to be lower than the marginal tax rate.

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dye trucking raised $190 million in new debt and used this to buy back stock. after the recap, dye's stock price is $9.50. if dye had 90 million shares of stock before the recap, how many shares does it have after the recap? enter your answer in millions. for example, an answer of $1 million should be entered as 1, not 1,000,000. round your answer to the nearest whole number.

Answers

Dye Trucking has 70 million shares does it have after the recap.

To calculate the number of shares after the recap, follow these steps:

1. Determine the amount spent on buying back stock: Dye Trucking raised $190 million in new debt for this purpose.
2. Find out the stock price after the recap: The stock price is $9.50.
3. Calculate the number of shares bought back: Divide the amount spent on buying back stock by the stock price: $190,000,000 / $9.50 = 20,000,000 shares.
4. Subtract the number of shares bought back from the initial number of shares: Dye had 90 million shares before the recap. After buying back 20 million shares, Dye has 90 million - 20 million = 70 million shares remaining.

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multiple control measurements give a more accurate assessment of performance than single measurements true false

Answers

True. Multiple control measurements generally provide a more accurate assessment of performance compared to single measurements.

Using a single measurement to evaluate performance can be limited and may not capture the full picture. By incorporating multiple control measurements, a more comprehensive and well-rounded evaluation can be achieved.

Having multiple control measurements allows for a broader assessment of various aspects of performance, such as efficiency, effectiveness, quality, customer satisfaction, financial metrics, and more. It helps to account for different factors that can impact performance and provides a more robust understanding of the overall performance of a system, process, or organization.

Additionally, relying solely on a single measurement can be subject to biases, errors, or distortions that may not accurately reflect the true performance. Multiple measurements help to mitigate these issues by providing different perspectives and allowing for cross-validation of results.

Overall, employing multiple control measurements is generally considered a best practice to ensure a more accurate and comprehensive assessment of performance.

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consumers choose which products and services to buy so that they may a. buy the cheapest products independently of their needs b. save money c. maximize their satisfaction d. all of the above

Answers

c. Consumers choose which products and services to buy so that they may maximize their satisfaction. This includes considering factors such as quality, price, features, and how well the product meets their specific needs.

While saving money may be a consideration, buying the cheapest products independently of their needs is not always the best way to maximize satisfaction, maximize their satisfaction. Consumers also evaluate the value and benefits they derive from a product or service, aiming to maximize their overall satisfaction. This includes considering their specific needs, preferences, and the perceived utility or enjoyment they will gain from the purchase. Therefore, option d, "all of the above," is not accurate, as the primary goal of consumer choice is to maximize satisfaction, taking into account various factors beyond just seeking the cheapest product.

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Suppose you find an investment strategy that consistently generates high positive alpha (risk adjusted return), and you used the Fama French three-factor model to risk adjust the returns. Which of the following statements is most accurate? a) This is an evidence against efficient market hypothesis. b) This is an evidence that the Fama-French three-factor model is wrong. c) This is an evidence against efficient market hypothesis and an evidence that the Fama-French three-factor model is wrong. d) This can be an evidence against efficient market hypothesis and/or can be an evidence that the Fama-French three-factor model is wrong. e) None of these is correct.

Answers

The most accurate statement in this scenario is: d) this can be evidence against efficient market hypothesis and/or can be evidence that the fama-french three-factor model is wrong.

here's the rationale behind this choice:

1) evidence against the efficient market hypothesis (emh): the efficient market hypothesis suggests that all relevant information is quickly and accurately reflected in asset prices, making it difficult to consistently outperform the market. if an investment strategy consistently generates high positive alpha (risk-adjusted return), it implies that the market is not fully efficient or that there are market inefficiencies that can be exploited. 2) evidence against the fama-french three-factor model: the fama-french three-factor model is a popular asset pricing model that extends the capital asset pricing model (capm) by including additional factors (size and value) to explain the expected returns of securities. if an investment strategy consistently generates high positive alpha even after being risk-adjusted using the fama-french three-factor model, it suggests that the model may not fully capture the risk factors or other important variables that contribute to the investment strategy's performance. thus, it can be seen as evidence that the fama-french three-factor model may be incomplete or inadequate for explaining the observed returns.

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Describe the industry disruptions that Zip is confronted with?
Why should Diamond conduct a MOST Analysis?
What are the factors influencing customer expectations?
What are the ways in which Zip can apply strategic piggybacking?
Examining competitive forces, discuss Zip’s options for growth and expansion?
Should Zip seek a partnership with its main competitor?
In what ways can Zip benefit from new branding?
What are recommendations do you have for Diamond?

Answers

Zip is facing a number of industry upheavals that are having an impact on its business model and market dynamics. These interruptions include, for example: a) disruptive technology, including Changing Consumer Behavior, Regulatory Challenges, and Competition from New Entrants

Even if they are revolutionary, not all interruptions are disruptive. For instance, the introduction of the first autos in the late 19th century did not constitute a disruptive technology since these early models were pricey luxury goods that did not affect the demand for horse-drawn carriages. Up until 1908,

when the less expensive Ford Model T made its appearance, the transportation business virtually remained unaffected.

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Which stock selection criterion, does the Stock Control Specialist use when older items are rotated out before the newer items?

Answers

The Stock Control Specialist uses the First-In, First-Out (FIFO) stock selection criterion when rotating out older items before newer items. FIFO is a widely-used inventory management technique that ensures older items are sold or used before newer ones, preventing potential waste and maintaining product quality.

This method is particularly important for perishable goods or products with a limited shelf life. By adhering to the FIFO system, Stock Control Specialists can effectively manage inventory levels, reduce spoilage, and maintain accurate financial records. This stock selection criterion helps businesses optimize their inventory management process and achieve cost-effective operations.

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what is the value of the stock if the dividend growth rate will stay 0.05 (5%) forever after 6 years?

Answers

The value of the stock if the dividend growth rate rate will stay 5% is given by 0.83.

The annualized percentage rate of growth that a particular stock's dividend experiences over time is known as the dividend growth rate. Regular dividend increases are a common goal for many established businesses. The dividend growth rate is an essential input for dividend discount models, which are stock valuation models.

The dividend discount model can only be used if you can figure out the dividend growth rate. A type of security-pricing model is the dividend discount model. The profit rebate model expects that the assessed future profits limited by the overabundance of interior development over the organization's assessed profit development rate-decides a given stock's cost. On the off chance that the profit rebate model method brings about a bigger number than the ongoing cost of an organization's portions, the model considers the stock underestimated. The dividend discount model is used by investors who believe they can determine a stock's intrinsic value by estimating the future value of cash flow.

A company's long history of strong dividend growth may indicate that future dividend growth is likely, indicating long-term profitability. An investor can use any time period they like to calculate the dividend growth rate. They can also use the least squares method or simply take a simple annualized figure over the time period to calculate the dividend growth rate.

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