1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
LUCKY_DIMON [66]
3 years ago
8

"A customer is long the Swiss Franc at a cost of $.60 per SF. The customer wishes to place a collar on the position using PHLX S

F FLEX options. To create the collar, the customer would:"
Business
1 answer:
tia_tia [17]3 years ago
3 0

Answer:

To create the collar, the customer would: <u>buy 1 PHLX 59 SF Call and sell 1 PHLX 61 SF Call.</u>

Explanation:

The meaning of a "collar" is that a put is bought at a strike price that is less than the price of the underlying instrument (this implies that a floor has been put on the price of the instrument); and that a call is disposed at a strike price which is higher than the price of the underlying instrument (this indicates that a ceiling above which the instrument will be called away has been created).

When a collar is put on the price, it indicates that the customer is majorly giving a guarantee for the underlying instrument's minimum and maximum price.

This should make the net cost of the collar to be close to zero due to the fact that the two contracts are "out the money" and also because the premium paid to buy the put is offset by the premium received when the call was sold.

Therefore, since customer in the question wishes to place a collar on the position using PHLX SF FLEX options, he would <u>buy 1 PHLX 59 SF Call and sell 1 PHLX 61 SF Call</u> to create the collar.

You might be interested in
Sadie and Ted must divide a stove, a hut, a chest, a nightstand, an igloo, and a trashcan. They assign points to each item as fo
Ulleksa [173]

Answer:

a. Ted gets the hut; Sadie gets the rest.

Explanation:

Since Ted placed a much more higher priority on the hut by assigning it 35 points more than all other items, and Sadie placed a very low priority on the hut by assigning it 10 points when compared to all other items, it shows Ted is ready to let go of other items just to have the hut, and Sadie is ready to let go of the hut to have the other item. Hence, the "Ted gets the hut, Sadie gets the rest" splits is efficient.

4 0
3 years ago
The cost of perpetual preferred stock is found as the preferred's annual dividend divided by the market price of the preferred s
VikaD [51]
Answer: A


Preferred share dividends are distributions of profits and not interest payments. Thus not tax-deductible.
5 0
2 years ago
At the end of the first year of operations, Yolandi Company had $900,000 in sales and accounts receivable of $350,000. XYZ’s man
vivado [14]

Answer:

1. $13,500

2. $13,500

3. $336,500

Explanation:

1. Bad debt expense:

= Sales × Percent of sales uncollectible

= $900,000 × 1.5%

= $13,500

Therefore, the bad debt expense for the year 2019 is $13,500.

2. Allowance for Doubtful accounts = $13,500

3. For the end of 2019, what is the company's net realizable value:

= Accounts receivable - Allowance for Doubtful accounts

= $350,000 - $13,500

= $336,500

6 0
2 years ago
Carmel Corporation is considering the purchase of a machine costing $41,000 with a 8-year useful life and no salvage value. Carm
Andru [333]

Answer:

E. $20,500

Explanation:

The average investment is defined as the average between the initial investment and the salvage value of the equipment.

In this situation, Carmel Corporation had an initial investment of $41,000 for the machine and its salvage value is zero. Therefore, Carmel's average investment is:

AI = \frac{\$41,000+0}{2} \\AI = \$20,500

The answer is alternative E. $20,500

3 0
3 years ago
An investor buys 100 shares of walmart at $45 per share on margin with an initial margin of 70% and a maintenance margin of 25%.
lana [24]
6250 + 56 = 6250 price
6 0
2 years ago
Other questions:
  • A 12-ounce beer with an alcohol content of 5% would have a proof of __________ .
    12·1 answer
  • In the Boston Consulting Group's Growth Share Matrix, the relative competitive position of a product or division is defined as i
    9·2 answers
  • Albert was wanting to save some money on his vacation, so he brought food and soft drinks with him to the airport to eat on the
    12·1 answer
  • Scenario D. Jimena works for a small company that makes nut butters from ingredients like cashews and macadamia nuts, and jams f
    13·1 answer
  • The table shows the balance of an Investment account at the beginning of each year the account was held. Assuming that no other
    5·1 answer
  • Pelican, Inc. had revenues of $395,000, expenses of $155,000, and dividends of $54,000 during the current year. Based on the giv
    13·1 answer
  • Your aunt is about to retire, and she wants to sell some of her stock and buy an annuity that will provide her with income of $5
    15·1 answer
  • Escareno Corporation has provided its contribution format income statement for June. The company produces and sells a single pro
    8·1 answer
  • Wolf Computer exchanged a machine with a book value of $40,000 and a fair value of $45,000 for a very similar machine. In additi
    6·1 answer
  • HELP
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!