Questions from Business Statistics

Q: We briefly mentioned the synthetic call, which consists of stock and

We briefly mentioned the synthetic call, which consists of stock and an equal number of puts. Assume that the combined value of the puts and stock exceeds the value of the actual call by less than the...

Q: Explain why the traditional auditing function cannot serve as the risk management

Explain why the traditional auditing function cannot serve as the risk management function.

Q: Explain how cash flow hedge accounting is applied in principle.

Explain how cash flow hedge accounting is applied in principle. Specifically, identify how this accounting treatment is different from the typical way cash flow transactions accounting is handled.

Q: Why is hedge accounting used, and how can it be misused

Why is hedge accounting used, and how can it be misused?

Q: Explain how an organization determines whether a hedge is sufficiently effective to

Explain how an organization determines whether a hedge is sufficiently effective to justify hedge accounting.

Q: Describe the primary differences between accounting for fair value hedges and accounting

Describe the primary differences between accounting for fair value hedges and accounting for cash flow hedges.

Q: Summarize in one sentence how each of the following organizations failed to

Summarize in one sentence how each of the following organizations failed to practice risk management: a. Metallgesellschaft b. Orange County c. Barings d. Procter & Gamble

Q: What is the purpose of risk management industry standards?

What is the purpose of risk management industry standards?

Q: What responsibilities does senior management assume in a risk management system?

What responsibilities does senior management assume in a risk management system?

Q: Consider a call option on an asset with an exercise price of

Consider a call option on an asset with an exercise price of $100, a put option on that same asset with an exercise price of $100, and a forward contract on the asset with an exercise price of $100, a...