It Is Week 1 and There Are Currently 20 as in Stock

question 117

Multiple Choice

It is week 1 and there are currently 20 As in stock. We need 300 As at the start of week 5. If there are scheduled receipts planned for week 3 and week 4 of 120 As each and A has a lead time of 2 weeks, when and how large of an order should be placed to meet the requirement of 300 As?

• A) Week 1, 300 As
• B) Week 3, 40 As
• C) Week 5, 40 As
• D) Week 4, 40 As
• E) Week 4, 300 As

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Definitions:

Conversion Price

The predetermined price at which convertible securities can be exchanged for another form, typically common stock.

Convertible Bond

A type of bond that can be converted into a specified number of shares of the issuing company's stock at certain times during its life, usually at the discretion of the bondholder.

Par Value

The face value of a bond or stock as stated by the issuing company, which does not necessarily coincide with its market value.

Expiration Date

In finance, this term often refers to the date on which a derivative contract, such as an option or futures contract, becomes void and ceases to trade.