Claudia Went to the West Coast to Attend Several Business

question 25

Multiple Choice

Claudia went to the West Coast to attend several business meetings with clients.She flew out on Wednesday afternoon, spent all day Thursday, Friday, Monday and Tuesday attending meetings, and then spent the rest of the week touring the area, returning home on Saturday.She spent $800 on airfare, $1,600 on hotels (10 nights at $160 per night) , $400 for a rental car ($40 per day from Wednesday night through Saturday of the following week) , and $300 for meals ($30 per day from Thursday through the following Friday and $15 on each of her travel days) .What is her allowable deduction for travel away from home?

• A)$1,505
• B)$1,610
• C)$2,305
• D)$2,410

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Definitions:

Hedge Ratio

The proportion of a position which is hedged, representing a strategy to minimize the risk of adverse price movements in an asset.

Binomial Option Model

A numerical method used in finance to price options by breaking down the option’s life into discrete time intervals.

Dynamic Hedging

A portfolio management strategy that involves continuously adjusting the hedge positions as the market conditions and prices of the underlying assets change.

Portfolio Insurance

Portfolio insurance is a strategy used by investors to hedge against market downturns by dynamically adjusting exposure to equities and typically involves the use of options or cash reserves.