Question
Which of the following instrument is subject to counter
party risk?Solution
Forwards are subject to counterparty risk because they are private contracts between two parties, and there is a risk that one party may default on their obligations. In contrast, futures contracts (option B) are typically traded on organized exchanges with a clearinghouse acting as the counterparty to both parties, reducing counterparty risk. Options (option C) also involve counterparty risk, but it is generally lower compared to forwards because options are standardized and often traded on organized exchanges with similar clearing mechanisms as futures contracts.
A firm reports the following data over two years:
Assuming no ...Under which of the following head will repayment of loan be shown in a cash flow statement?
A company is required to disclose the details of shareholders holding shares above a certain threshold in its financial statements. What is this thresho...
Based on the below information, calculate the net cash flow of the company from operating activities?Â
Net Profit = ₹1,80,000Â
Depreci...
A firm reports the following: Sales = ₹40,00,000; Cost of Goods Sold = ₹28,00,000; Inventory = ₹7,00,000. What is the Inventory Turnover Ratio?
SDF Ltd recorded Net Sales of ₹10,00,000 during the year. Its Gross Profit was ₹2,50,000. If the inventory of the company at the end of the year was...
A company repaid a long-term loan of ₹3,00,000 during the year. How is this reported in the cash flow statement?
Match the following:
A) Herzberg P) Need Theory
B) McClelland Q) Expectancy Theory
C) McGregor R) Motivation Hygiene Theory
...
GH Ltd took a term loan of Rs.24 crore for a period of 20 years to be repaid in equal annual instalments. The interest is 10% p.a. on reducing balance. ...
The sale of an old vehicle for ₹2,00,000 (book value ₹2,50,000) will be reported in the cash flow statement as:
