The investors loss is $150. (Option D) See the explanation for same below.
<h3>What is the explanation for the above answer?</h3>
It it to be noted that the investor exercised the right to acquire the stock for 45 and may sell it on the market for 47.25, resulting in a 2.25 gain.
The investor loses of $0.75 per share when the gain of $2.25 is subtracted from the premium of 3.
When the $0.75 loss is multiplied by 200 (the number of shares transacted), the result is a loss of $150.
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Full Question:
If an investor with no other positions buys 2 DWQ Jun 45 calls at 3, and he exercises the calls when the stock is trading at 47.25 and immediately sells the stock in the market, what is the investor's profit or loss?
A) $75 profit.
B) $75 loss.
C) $150 profit.
D) $150 loss.
Answer:
No, you wouldn't raise the price, not even by a cent.
Explanation:
The <em>equilibrium price</em> in a perfectly competitive market means that, when goods are sold at that price, there is no excess or shortage of the goods. The demand and the supply are equal.
If you were to rise your price above the equilibrium price, then the consumers will prefer to buy their goods from the rest of the firms that are selling at the equilibrium price. Your supply wouldn't sell. You would eventually be forced to accept selling your goods at the equilibrium price.
Answer:
Matching Statements to Appropriate Terms:
Price-earnings ratio = Profitability Ratio
Return on Assets = Profitability Ratio
Accounts Receivable Turnover = Liquidity Ratio
Earnings per share = Profitability Ratio
Payout ratio = Profitability Ratio
Working capital = Liquidity Ratio
Current ratio = Liquidity Ratio
Debt to Assets = Solvency Ratio
Free Cash Flow = Solvency Ratio
Explanation:
Profitability Ratios are one of the classes of financial metrics that measure a business's ability to generate earnings relative to its revenue, operating costs, assets, or shareholders' equity during a period of time.
Liquidity Ratios measure the ability of the company to pay its maturing short-term debt obligations from its current assets. They include the working capital, the current ratio, and the acid-test ratio.
Solvency Ratios measure the ability of the company to pay its maturing long-term debt obligations from its assets.
Governments implement Administrative trade policies that are designed to make it difficult for imports to enter a country.
<h3>What is Administrative Trade Policies?</h3>
Administrative trade policies are bureaucratic rules designed to make it difficult for imports to enter a country. These are rules and regulations made by the government to control the entry of particular products into the country.
<h3>What is Trade policy ?</h3>
Trade policy is the set of agreements, regulations, and practices by a government that affect trade with foreign countries. Each nation determines its own standards for trading, including its tariffs, subsidies, and regulations.
Trade policies have a significant effect on the international economy and on financial markets. They affect exchange rates, the availability of goods, and the prices that people pay for them, among many other economic factors.
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