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During a remote session a hedging example involving the future price of apples was considered. This was used in considering the Risk Assessment Process of
During a remote session a hedging example involving the future price of apples was considered. This was used in considering the Risk Assessment Process of the COSO Internal Control Framework. Consider the following: A speculator at an investment bank enters into an enforceable contract to sell 100,000 bushels of apples in October for $30 a bushel. The actual price of a bushel of apples in October is $45. I. For the speculator to make a profit, the price of apples in October should go up, i.e. more than $30 per bushel. II. As stated above the profit or loss for the speculator Would be $1,500,000. a. I is true; II is true. b. I is true; II is false. c. I is false; II is true. d. I is false; II is false. During a remote session a hedging example involving the future price of apples was considered. This was used in considering the Risk Assessment Process of the COSO Internal Control Framework. Consider the following: A speculator at an investment bank enters into an enforceable contract to sell 100,000 bushels of apples in October for $30 a bushel. The actual price of a bushel of apples in October is $45. I. For the speculator to make a profit, the price of apples in October should go up, i.e. more than $30 per bushel. II. As stated above the profit or loss for the speculator Would be $1,500,000. a. I is true; II is true. b. I is true; II is false. c. I is false; II is true. d. I is false; II is false
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