GoTranscript Audio Test Answers November 25, 2021
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Primary reasons that you might want to consider hedging, one is to reduce your short term cash flow cold tility. Another is to maximize return on capital for whatever the investor's target level of risk is, a lot of big chunks of benefits are achieved. If, if you successfully reduce cash flow volatility, the biggest one being that the risk of bankruptcy is- is reduced, which, which not only reduces the cost of borrowing, but also makes lenders more willing to lend you any money to begin with. Furthermore, more accurate in earnings and forecasting is- is possible when hedging a company with more predictable earnings will in general be more valued by investors? If your company uses hedging to withstand short term price movements, its management can then focus the energy more fully on the company's core competencies, doing what they are best at.
Of some people don't like the idea of hedging against price fluctuations, because they feel that in some ways it's- it's a lot like gambling. Well, those people are what we in the financial advisor trade call default. And it's not true Tom show gambling increases your risk profile by making a bet on Prospect pricing limits. But by hejin You Mr. or Miss Smarty cute pants are doing the exact opposite your efforts to reduce the risk profile of your organization and don't have some preconceived notion that the- the odds are somehow in your favor. By the way, how do you like my use of that word effort in in the previous paragraph, your spell checker might be telling you it's not a real word. And before today, I would have agreed with that spell checker.
However, on- on my way home from my gym fitness 19. I heard a newscaster using it in a story about 911. Now we're coming up on the 20th anniversary of that sad day. So I really appreciated that reporter using a bogus word to- to distract me from the feels I was feeling anyway, when the strike price of an option is equal to the current market price of a share. That option is referred to as an at the money option. For example, when Pay Pal share price is 1500 bucks, and the call or put option is also $1,500. It's called an at the money option. As you probably know, all else being equal the further the option is in the money more profitable that options will get.
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GoTranscript Audio test answers November 2021
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