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alexgriva [62]
3 years ago
6

The current spot exchange rate is $1.55 = €1.00; the three-month U.S. dollar interest rate is 2 percent. Consider a three-month

American call option on €62,500 with a strike price of $1.50 = €1.00. What is the least that this option should sell for?
Business
1 answer:
Elan Coil [88]3 years ago
8 0

Answer:

The least that this option should sell for is $3,125.

Explanation:

Acording to the data, we have the following:

The current spot exchange is $1.55=€1.00

The call option has a strike price of $1.50=€1.00 and spot price is €62,500

Hence,to calculate  the least value this option should sell for we have to calculate the following:

$1.55-$1.50=$0.05

Hence, $0.05*62,500= $3,125.

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A steel mill raises the price of steel by 7% which results in a 20% reduction in the quantity of steel demanded. The demand curv
Nana76 [90]

Answer:

Elastic demand

Explanation:

The price elasticity of demand is described as the sensitivity of demand to changes in its price. A product is price elastic when a small change in prices causes a significant change in quantity demanded. If a small change in price results in minimal impact in quantity demanded, the product is price inelastic.

Steel mill raised its prices by 7 percent. As a result, the demand declined by 20 percent. The demand decreased by a bigger rate than the change in price. It means a small change in price causes the demand to change significantly. Therefore, the demand curve is price elastic.

8 0
3 years ago
Delta Construction Corporation, a general contractor, hires Eagle Electrical Company, a subcontractor, to wire a new office buil
nignag [31]

Answer: excused by Delta's failure to pay.

Explanation:

Delta Construction Corporation hires Eagle Electrical Company, as a subcontractor, to wire its new office building. After the completion of the work, Eagles is owed more than $50000.

Eagle's suspension of work is most likely due to the excuse by Delta's failure to pay. Delta has a right to pay up the money owed to Eagle. Lack of payment can lead to court cases.

3 0
3 years ago
In applying the high-low method, what is the fixed cost? month miles total cost january 80,000 $144,000 february 50,000 120,000
kupik [55]
The high and low levels of activity are 90,000 miles in April and 50,000 miles in February. The costs at these two levels are $195,000 and $120,000, re-spectively. The difference in costs is $75,000 ($195000-120000), and the difference in miles is 40,000 (90000-50000). Therefore, variable cost per unit is $1.875computed as follows.
75000÷40000=1.875

Determine the fixed costs by subtracting the total variable costs at either the high or the low activity level from the total cost at that activity level
Variable cost=1.875×50,000=93,750

fixed cost=120,000−93,750=26,250


5 0
3 years ago
The __________ assures the payment of otherwise non-collectable court judgments against licensees who have committed fraud, misr
Finger [1]

The SAFE act assures the payment of otherwise non-collectable court judgments against licensees who have committed fraud, misrepresentation, deceit, or conversion of trust funds in a transaction.

<h3>What is the SAFE act?</h3>

This was the act in the United States that made it mandatory for houses to be registered and licensed.

The act is based on houses that are used as residences. The full meaning of the act is the  Secure and Fair Enforcement for Mortgage Licensing Act.

The main purpose of the SAFE act is to try to ensure that consumers are protected and also help in the reduction of fraud. This would be done by setting a standard for licensing and the originators of mortgage loans.

Hence the correct answer to the question is the SAFE act.

Read more on court judgement here; brainly.com/question/14077067

#SPJ1

4 0
2 years ago
An organization that consists of many layers of management is referred to as a(n) ____________ organization.
Jlenok [28]
I believe the answer is either tall or bureaucratic organization.
7 0
3 years ago
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