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muminat
1 year ago
10

The buyer of a put expects the price of the underlying stock to rise. a. true b. false

Business
1 answer:
hoa [83]1 year ago
6 0

The buyer of a put expects the price of the underlying stock to rise is a. true

<h3>What does buying a put mean?</h3>
  • Short selling and put options are fundamentally negative methods used to speculate on the underlying securities or index's possible decline.
  • Short selling and buying put options are both bearish techniques that increase in profitability when the market falls.
  • Short selling is selling a security that the seller does not own but borrows and then sells in the market, with the possibility for substantial losses if the market rises.
  • Purchasing a put option grants the buyer the right to sell the underlying asset at the price specified in the option, with the maximum loss being the option premium paid.

learn more about buying a put refer:

brainly.com/question/17164648

#SPJ4

You might be interested in
The Internet provides marketers and consumers with opportunities for much greater interaction and ________ than other marketing
fredd [130]

Answer:

Letter E is correct. <u>Individualization.</u>

Explanation:

We live in the information age. The internet is a tool that has revolutionized the way individuals communicate, including companies' relationships with their target audience.

Through the internet, organizations have been able to achieve direct customer interaction and individualization that enables them to create personalization and rapid communication, as well as lasting relationships, through the marketing strategy of delivering relevant content as well as advertising that generates identification and engagement and value. for the brand.

Digital presence is a low cost and extremely relevant strategy to assist in processes such as market segmentation, results measurement, competitiveness reach, offer personalization, and customer attraction and loyalty.

4 0
3 years ago
Art, Inc., has 2,500 shares of 5%, $100 par value, cumulative preferred stock and 20,000 shares of $1 par value common stock out
stepladder [879]

Answer:

The amount of dividend received by common stockholders in 2017 = $7500

Explanation:

The preference shares are cumulative which means the 2015 dividend on cumulative preference shares will be paid in the next year when dividend is declatred.

The total dividend on preference shjares is = 2500 * 100 * 0.05 = $12500

In 2016 dividend of 22500 is declared and paid.

Out of this 22500, 12500 relates to prefernece dividend for 2015.

The remaining 10000 relates to 2016 preference dividend. Thus, 2500 of 2016 preference dividned is outstanding and will be paid in 2017.

In 2017 out of 22500, 15000 (12500 + 2500) dividendd is paid to preference share holders.

The amount of dividend received by common stockholders in 2017 = 22500 - 15000 = $7500

7 0
3 years ago
E-Eyes has a new issue of preferred stock it calls 20/20 preferred. The stock will pay a $20 dividend per year, but the first di
brilliants [131]

Answer:

$25.86.

Explanation:

To address this problem we first calculate the present value of all dividend received at time t = 20, then we discount that sum to time t = 0 (now).

The cashflow pattern of this preferred stock is similar to perpetuty.

Stock value at time t = 20 = Dividend/Required rate of return = 20/10.5% = 190.48

Stock value at time t = 0 = (Stock value at time t = 20)/(1 + Required rate of return)^20 = 190.48/(1 + 10.5%)^20 = 25.86.

6 0
2 years ago
Barry's Sport Shop calls Champs Tee Shirt Company to order 200 designer tee shirts at $2 per shirt. The next day, Barry decides
lara31 [8.8K]

Answer: No.

Explanation: Based on the initial agreement made between Champs Tee shirt company and Barry's sport shop, which was the de sealed for the purchase of 200 shirts at a price of 100. Even though additional demand of 100 t-shirts was made, Champs decided to send 200. Barry will be unable to force Champs to send the additional 100 because the transaction was made and agreed on verbally without any written. or signed document which could be tendered as evidence when trying to force Champs to send the additional 100

8 0
3 years ago
Dan sells newspapers. Dan says that a 8 percent increase in the price of a newspaper will decrease the quantity of newspapers de
ivann1987 [24]

Answer:

For Dan, the demand is price inelastic

Explanation:

One of the factors tat affect the quantity demand for a product is the price of the product. According to the law of demand, at lower price more quantity of a product would be purchased than at a higer price, all other this being being equal.

Price elasticity of Demand (PED)

The extent to which a change in price will cause a change in the quantity demand for a product is called the price elasticity of demand. It measures the degree of responsiveness of quantity demand to a change in price.

It is calculated as

PED =% change in quantity demand / % change in price.

For Dan Newspaper , the price elasticity of demand

             = 4%/8%

            = 0.5

If the PED is greater than 1, the demand is price elastic

If the PED is less than 1 , demand is price inelastic

For Dan, the demand is price inelastic

4 0
3 years ago
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