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Assoli18 [71]
2 years ago
15

You are researching a stock currently priced at $35 per share. Call options are currently priced at $3.00, and puts are priced a

t $2.00. You use Black-Scholes and put-call parity to determine that calls are fairly priced, but the puts should be priced at $1.00. What would be TRUE given this information
Business
1 answer:
andre [41]2 years ago
3 0

For a profit with little risk, you should short the puts.

<h3>What does "stock" mean?</h3>
  • A stock is a colloquial phrase for any company's ownership certificates. On the other hand, a share alludes to a certain company's stock certificate.
  • You become a shareholder if you possess shares of a specific corporation.
  • There are two categories of stocks: ordinary and preferred.
<h3>A stock example is what?</h3>

Stock refers to a portion of a company's ownership. 100 shares of the Disney Corporation are an illustration of stock.

<h3>What exactly is a stock example?</h3>

Low risk investments are by definition safer than comparable ones. In comparison to options, stocks carry less risk. The right is the predetermined ability to acquire or sell an item at a predetermined price on a specific date.

learn more about stocks here

<u>brainly.com/question/1166179</u>

#SPJ4

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A bond has a par value of $1,000, a time to maturity of 15 years, and a coupon rate of 7.90% with interest paid annually. If the
Effectus [21]

Answer:

$5.97

Explanation:

In order to determine the capital gain of the bond in a year's time,it is first first of all important to calculate the yield to maturity on the bond which is arrived at by applying the rate formula in excel as follows:

=rate(nper,pmt,-pv,fv)

nper is the number of coupon interest the bond would pay over its entire life of 15 years which is 15

pmt is the annual interest,7.9%*$1000=$79

pv is the current market price of the bond which is $790

fv is the value of $1000

=rate(15,79,-790,1000)=10.79%

Afterwards,the price of the bond in one year' time can then be calculated:

=-pv(rate,nper,pmt,fv)

The variables in the formula are as above except for nper which would reduce by 1 in a year's time

=-pv(10.79%,14,79,1000)

pv=$ 795.97  

Hence the capital gain=price now-price one year ago/price one year ago

price now is $795.97  

price one year ago was $790

Capital gain=$795.97-$790=$5.97

Capital gain %= ($795.97-$790)/$790=0.76%

8 0
3 years ago
Which statement is correct?
Allisa [31]

Answer: (C)  The production of non durable consumer goods is more stable than the production of durable consumer goods over the business cycle.

Explanation:

 The consumer durability of the goods has the significant life span and the production of the non durable goods of the consumer are basically purchased for the immediate consumption over the business cycle so that is why it is more stable as compared to the production of the durable goods.

The example of the durable consumer goods are smartphones, furniture and the other household appliances. On the other hand, the non durable consumer goods are more stable as it contain daily use material like food, clothes and beverages.  

4 0
3 years ago
Which of the following is one of the steps of the ethnographic research
jek_recluse [69]

Answer: participant observation, interviews and surveys. All of these ethnographic methods can be very valuable in gaining a deeper understanding of a design problem.

Explanation:

6 0
3 years ago
What is the goal of a press release?
VladimirAG [237]
B. creating positive media attention
4 0
3 years ago
Read 2 more answers
Treasury stock that was purchased for $2,500 is sold for $3,000. As a result of these two transactions combined, a.income will b
Fantom [35]

Answer:

The stockholder's equity will be increased by $500

Explanation:

While stockholders equity is the amount of assets available to shareholders after all liabilities have been settled , treasury stock is the stock that is bought back by the issuing organisation with the aim of reducing the number of outstanding stock in the open market.

Looking at the scenario given , it was an indirect way of raising fund and increasing the equity of the stockholders equity as the treasury stock was later resold at a higher price.

Therefore , the stockholder's equity increases by 3,000- 2500 = 500

4 0
3 years ago
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