Coal provide a cheap source of energy and it is a major source of energy for the world. Coal consumption is hampered mainly by a. Environmental concerns b. Technological concerns c. Political concerns d. Financial concerns
1. Coal provide a cheap source of energy and it is a major source of energy for the world. Coal consumption is hampered mainly by
a. Environmental concerns
b. Technological concerns
c. Political concerns
d. Financial concerns
2. JJ Alfred Ltd. Is an energy company and their financing comes from 60% equity and 40% debt, risk free rate is 3% and expected market rate is 10%, loan interest is 8% and tax deductible under a tax rate of 28%, beta (β) is 1.4 showing higher risk. What is the WEIGHTED AVERAGE COST OF CAPITAL
a. 9.3%
b. 9.2%
c. 9.1%
d. 9.0.%
4. A producer holding a commodity is said to be _______________ and could hedge by going __________ a futures contract
a. Long long
b. Long short
c. Short short
d. Short long
5. __________________refers to the benefits of holding some inventory rather than completely depending on the futures market for supply
a. Contract yield
b. Convenience yield
c. Storage benefit
d. Holding benefit
5. In the LNG business value chain, which of the processes is the most significant cost unit
a. Exploration and production cost
b. Regasification and storage cost
c. Shipment and transportation cost
d. Liquefaction cost
6. What is a “spark spread”?
a. The difference between the price of electricity and fuel cost
b. Difference between the price of gasoline and refinery cost
c. Difference between the price of natural gas and engine cost
d. None of the above
7. In the generation of electricity, generating too little electricity will cause __________ and generating too much electricity will cause__________________
a. Blackout and brownout
b. Brownout and blackout
c. Lights on and lights out
d. Lights out and lights on
8. Giant energy PLC is entering a fixed price contract and it is attempting to estimate its credit risk exposure which can be calculated as
a. Sum of settlement and displacement risk
b. Sum of the settlement and market price risk
c. Sum of the legal and force majeure risk
d. Sum of the legal risk and replacement risk
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