"An investor has a portfolio of diversified blue chip stocks with a current market value of $350,000. The portfolio has a computed beta factor of 1.8. The customer wants to protect the portfolio from a declining market with the use of OEX contracts. The OEX closed this day at 350. To hedge with "at the money" contracts, the customer should:"

Buy 18 contracts

Explanation:

Hedging against the risk involved in an investment means the use of market strategies or financial instruments to offset risk.

When there is a drop in the market value, any loss that is incurred on the portfolio will have to be offset by the long puts gain. This implies that 10 put contracts will have to be required for hedging. This is calculated as:

= $350,000/(350 × 100)

= $350,000/35,000

= 10 contracts

Since the portfolio has a computed beta factor of 1.8, we then multiply 10 by 1.8. This will be:

= 10 × 1.8

= 18 contracts.

Spencer's performance appraisals violate the objective part of the OUCH test

Explanation:

"The OUCH Test is a rule of thumb you should use whenever you are contemplating any employment action. You use it to maintain equity for all of your employees or applicants. OUCH is an acronym that stands for Objective, Uniform in application, Consistent in effect, and Has job relatedness. An employment action should generally be objective instead of subjective; we should apply all employment tests the same way, every time, with everyone, to the best of our ability; the employment action should not have an inconsistent effect on any protected groups; and the test must be directly related to the job to which we are applying it."

Reference: Lussier, Robert N., and John R. Hendon. “Fundamentals of Human Resource Management: Functions, Applications, and Skill Development.” Learning Objectives | SAGE Companion, 2019