Use the following table that shows the options available on DEF stock (which currently trades at $112) to answer the next seven questions.
|
Call Premiums |
Put Premiums |
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|
Strike |
Jan. |
Feb. |
Jan. |
Feb. |
||||||||||||||||||||||||||||||
|
105 |
7.50 |
7.75 |
.50 |
.60 |
||||||||||||||||||||||||||||||
|
110 |
6.25 |
6.50 |
.65 |
.75 |
||||||||||||||||||||||||||||||
|
115 |
1.15 |
1.20 |
3.25 |
3.62 |
||||||||||||||||||||||||||||||
|
120 |
.75 |
.95 |
8.10 |
8.85 Question 15
5 points Question 16
5 points Question 17
5 points Question 18
5 points Question 19
5 points Question 20
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At least 200 words.
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Financial risk is an important concept for any healthcare manager. The manager must understand how the various aspects of risk impact the organization’s potential access to capital for much needed investments. For this discussion, explain what financial risk is. Also, discuss how businesses and investors view risk. Provide an example that an organization might face. Lastly, discuss the terms stand alone and portfolio risk. In your opinion, is one more impactful to the organization than another?
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Pick a federal agency of your choice. Find that agency’s appropriation for a recent fiscal year. That may be located in an annual appropriation act or in a consolidated appropriation bill that lumps a number of normal appropriation acts together. Are there provisions of a somewhat substantive nature that are included in the appropriation act?
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The value of HILEV firm at the end of one year can be $50 m or $100 m with equal probability of 0.5. The firm has debt with a face value of $50 m that matures in one year. Assume that investors are risk-neutral and the risk free rate is zero. The CEO of the firm decides to substitute assets of the firm with more risky assets immediately, so that the value of the firm at the end of one year is either $30 m or $120 m with equal probability of 0.5. This asset substitution will lead to
A gain of $10 million for stockholders and a loss of $10 million for bondholders
b. A loss of $10 million for stockholders and a gain of $10 million for bondholders
c. No gain or loss to debtholders or equity holders
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In your own words, compare the information provided by the balance sheet and the income statement. When considering scenarios like a supplier planning to extend credit with terms of payment in 60 days, indicate which type of financial statement you would use and provide a detailed rationale as to why you selected that type of financial statement. Participate in further discussion by identifying a peer that selected a different financial statement and provide a detailed explanation as to whether you agree or disagree with the peer's rationale. |
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After this is explained, give an example you’ve seen or read.
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The $800 million loan carried a 6% interest rate and had the following repayment of principal schedule:
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Year 2: $32 million
Year 3: $57 million
Year 4: $82 million
Year 5: $82 million
Year 6: $415 million
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