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Bogdan [553]
11 months ago
13

the stock price jumps twice in a given year. if it jump up, it goes up by 10%, if it goes down, it goes down by 20%. the stock i

s currently trading at 70 and pays no dividends. the annual interest rate is 4%, compounded semi-annually. find the current price p0on a 1 year european put option with strike price 65.
Business
1 answer:
cestrela7 [59]11 months ago
6 0

The value of European Put option is 9.

<h3>What is Put option?</h3>

Under derivative securities market an option whose value depend on the underlying item where delivery is not made generally & net settlement done by squaring off the position and depends on the volatility of market.

Put Option is a bearish school of thought where investor thinks the market will decline & the value will be below the exercise price.

In hedging the position of investor make certain not better, therefore the value of put option lies between zero or difference value among the spot price & exercise price with discounting annual market interest rate:

Spot = 70

Exercise = 65

Future Price = 70 × 80% = 56

Rate = 4 % Compounded semi annually.

Value of Put = Spot Price - Exercise Price

                     = 56 - 65

                     = 9  

Thus the value of put option will be 9 (65-56).

To know more about Put option refer:

brainly.com/question/24016129

#SPJ1

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Answer:

C. short-run aggregate supply curve leftward

Explanation:

When the cost of production or inputs of production increase the short run supply curve shifts left because the producers are now willing to sell less at the same price because it is more expensive for them to produce, so at every price the production decreases because of which the supply curve shifts left. The long run supply curve isn't affected by an increase in costs of resources because it is the potential of the economy and an increase in costs of does not change the potential of the economy.

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2 years ago
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Answer:

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Explanation:

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2 years ago
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Ian has five years of managerial experience with a shopping center. However, he quit his job to attend to his ailing mother. He
vovikov84 [41]
Ian is a uniquely good position here: the truth happens to be one of the best explanations he could possibly give. The fact that he quit his job to look after his sick mother, assuming that his former employer has positive things to say about him, is a solid reflection of his character and a sign that he was out of the job market not due to a lack of options, but a need to take care of a sick family member.
Ian should tell the truth, and explain the decision thoroughly to demonstrate the kind of person he is to the prospective employer, and what his priorities are. 
3 0
3 years ago
rabapples, Inc. purchases and sells boxes of dried fruit. The following information summarizes its operating activities for the​
pantera1 [17]

Answer:

$40.875

Explanation:

Given that,

Selling Expenses = $ 9,600

Merchandise Inventory on December 31 = 33,000

Merchandise Inventory on January 1 = 47,000

Purchases of merchandise = 83,500

Rent for store = 12,100

Sales commissions = 7,300

Sales revenue = 168,500

Cost of goods sold:

= Beginning merchandise inventory + Merchandise purchase - Ending merchandise inventory

= $47,000 + $83,500 + $33,000

= $163,500

If Crabapples sold 4,000 boxes of dry fruit during the​ year, then the cost per box of dry fruits is:

= Cost of goods sold ÷ Number of boxes sold

= $163,500 ÷ 4,000

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3 0
3 years ago
Suppose you borrow $10,000 right now to start a business. If the terms of the loan require you to pay back $16,000 in 5 years, w
Alexxandr [17]

Answer:

r = 9.86%

Explanation:

The formula for calculating the future value of an invested amount yielding a compound interest is given by:

FV=PV(1+\frac{r}{n})^{nt}

where:

FV = future value = $16,000

PV = present value = $10,000

r = interest rate = ?

n = number of compounding period per year = 1

t = time in years = 5

∴ 16000=10000(1+\frac{r}{1})^{5}

dividing both sides by 10,000

\frac{16000}{10000} =\frac{10000(1+\frac{r}{1})^{5}}{10000}

1.6 = (1 + r)^{5}

to remove the power of 5, we have to take the 5th root of both sides:

(1.6)^{1/5} = (1 + r )^{5 * 1/5}

Using your calculator:

1.09856 = 1 + r

∴ r = 1.09856 - 1 = 0.09856

r = 0.0986 = 9.86%

∴ r = 9.86%

8 0
3 years ago
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