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dusya [7]
3 years ago
15

Which of the following is true regarding the value of an option? A) Unlike the Black-Scholes formula, the Put-Call Parity sugges

ts that the volatility of underlying asset is not a factor that affects the value of an option. B) The option premium is greater or equal to its intrinsic value because of the time premium. C) The call and put premiums are unrelated since they depend on different set of variables. D) The writer of the call option pays the same premium as the buyer of the put option. E) When the call option is out-of-the-money and the put option is in-the-money, the call must be more valuable than the put.
Business
1 answer:
NeX [460]3 years ago
6 0

Answer: B) The option premium is greater or equal to its intrinsic value because of the time premium.

Explanation:

The option premium can be calculated by adding the time premium and the intrinsic value. The time premium is the part of the option premium that accounts for the time remaining till the premium matures while the intrinsic value is the difference between the value of underlying asset and the strike price.

As the time premium can be zero but never negative, the option premium can either be greater than its intrinsic value or equal to it. It cannot be lower than it because of the time premium.

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snow_lady [41]

Answer:

Ping Pong Ltd

i. No.  The bank has not breached its duty of care to its customer, Ping Pong Ltd.

ii. No.  The customer, Ping Pong, has not breached its duty of care to its bank.

Explanation:

The breach occurred between Mr. Z. and Ping Pong.  Certainly, Mr. Z. breached his professional and fiduciary duty of care to Ping Pong, his employer.  By presenting forged documents as evidence of supply transactions, Mr. Z. has fraudulently defrauded his employer to the tune of $6.6 million.  It is the responsibility of Ping Pong to recover from Mr. Z. as soon as the fraud is discovered.

8 0
3 years ago
Marigold Corporation's December 31, 2020 balance sheet showed the following: 6% preferred stock, $20 par value, cumulative, 4000
ycow [4]

Answer: $‭47,989,000‬

Explanation:

Total Paid-in capital = Preferred stock + Paid-in capital in excess of par value - preferred stock + Common stock +  Paid-in capital in excess of par value - common stock

= 420,000 + 69,000 + 20,000,000 + 27,500,000

= $‭47,989,000‬

8 0
3 years ago
For years, it has been Sarah's dream to start a charitable organization called Every Kid Eats in her hometown of Golden Valley.
Blababa [14]

Answer:

The answer is Nutrition is important to everyone, especially when they are learning, Every Kid Eats is an organization that helps elementary school age children in our town of Golden Valley eat better throughout the day.

Explanation:

Because the other statements talked about feeding all the childen in town. Her organization wants to feed the elementary school's childreN. Even though she wants to feed undernourished kids, the only statement that expressed better was the first one.

4 0
3 years ago
If firms pay what are called​ "efficiency wages", they pay wages that A. are lower than average to ensure maximum profit. B. low
aalyn [17]

Answer:

The correct option is (C)

Explanation:

Efficiency wages are higher than market wages that are paid by employers to motivate employees so that they perform better and their efficiency and productivity increase. Efficiency wages are directly proportional to productivity. The more the efficiency wage, higher will be labor productivity.

Efficiency wages are lie above equilibrium level. It helps in reducing labor turnover, improve labor efficiency and attract skilled employees.

5 0
3 years ago
Because she beat her goal this year by nearly 30 percent, lori has been telling everyone in the sales department of her incredib
yarga [219]

Lori is exhibiting a type of bias that is well-known as self-serving bias.

Self-serving bias is defined as <u>distortion in perceptual processes due to the need to maintain and enhance the person’s self-esteem – also known as a person’s tendency to see themselves in a favorable manner</u>. In the case of Lori, when she cannot reach her goal, she blames the poor economy, but when she managed to do it, she attributed it to her skills as a salesperson.

7 0
3 years ago
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