Automobile loans is not a type of consumer credit
The answer is we can use our cognitive resources for other more important matters. In addition to social cognition, it brings up to the way people select, understand, remember, and use social data to make conclusions and decisions about themselves and others and Schemas are the cognitive constructions we use to establish our information of the social world.
Answer:
Sell 1,000 shares of XXYZZ and buy 10 XYZZ put contracts
Explanation:
In the stock markets a bullish trend is when the price of the stock increases, while a bearish market is when the stock price decreases.
In this scenario the customer owns 1,000 shares of stock XYZZ stock that have been in a bullish trend rising from $40 to $45.
Usually a bullish trend is followed by a bearish trend.
If the customer is sure there will be a bear on the stock them he should sell or make a put trade.
On sale of the 1,000 shares the customer will make $5 per share, and enter a put option since the market is going bearish.
We can use the PV of perpetuity formula as the dividends will be paid for the infinite period of time. But we need to do a small adjustment for floatation cost. Following formula can be applied:
Cost of preferred stock = Annual Dividend / (Price x (1- flotation cost %))
= 8.50 / ( 97.50 x (1- 0.04))
= 8.50/93.60
= 9.08%
