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likoan [24]
3 years ago
14

You would like to hold a protective put position on the stock of Ximera Corp to lock in a guaranteed minimum value of $50 at yea

r-end. Ximera currently sells for $50. Over the next year. Ximera's stock price will increase by 10% or decrease by 10%. The T-bill rate is 5%. Unfortunately, no put options are traded on Ximera Corp. Suppose the desired put options with X = 50 were traded. What would be the hedge ratio for the option?
Multiple Choice
A. 1
B. -1
C. -0.5
D. 0.5
Business
1 answer:
Luba_88 [7]3 years ago
7 0

Answer: C)  -0.5

Explanation:

So first we take down the information we where given;

lets say

x = 50

SO = 50

therefore

uSO = ( 50 * ( 1 + 0.1) = (50 * 1) = 55

dSO = ( 50 * ( 1 - 0.1) = (50 * 0.9)  = 45

SO

Pd = (x - dS0) = 50 - 45 = 5

Pu = (x - uSO) = 50 - 55 = (-5) because its negative, its = 0

now to get the HEDGE RATIO

we say HEDGE RATIO = (Pu - Pd) / ( uSO - dSO)

HEDGE RATIO = ( 0 - 5) / ( 55 - 45)

HEDGE RATIO = -5 / 10

HEDGE RATIO = -0.5

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Answer:

A

Explanation:

they have to know what the person is being arrested for

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3 years ago
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Which social network has more than 410 million registered members and because of that popularity, more than 4 million companies
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The social media platform with more than 410 million people registered is Linkedin

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Explanation:

7 0
4 years ago
Suppose there is a policy debate over whether the United States should impose trade restrictions on imported ball bearings:
Margarita [4]

Answer:

D. National security argument.

Explanation:

Looking at the options, the correct one is National security argument. This is because the congress woman is arguing that ball bearing industry is important in making weapons which is in turn very important to national security. She argues that imposing trade restrictions on free trade, it will make the United States begin to produce their own weapons which will be helpful in time of war when they need a lot of weapons.. Thus, her justification in her argument is primarily for National Security!

6 0
3 years ago
____ is not a characteristic common to all organizations. Select one: a. Equal authority and responsibility b. Common goal or pu
Lyrx [107]

Answer: Equal Opportunity and Responsibility.

Explanation: Every successful organization share in common: a common goal they target to achieve, proper coordination, and hierarchy of authority.

In most organizations authority is NOT equal and each individual has their key roles they perform to ensure success is achieved.

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5 0
3 years ago
The Purple Martin has annual sales of $687,400, total debt of $210,000, total equity of $365,000, and a profit margin of 5.9 per
enot [183]

Answer:

7.1%

Explanation:

Purple martin has an annual sales of $687,400

The total debt is $210,000

Total equity is $365,000

Profit margin is 5.9%

= 5.9/100

= 0.059

The first step is to calculate the net income

Net income= sales×profit margin

= $687,400×0.059

= $40,556.6

The next step is to calculate the total assets

Total assets= Total debt+Total equity

= $210,000+$365,000

= $575,000

Therefore, the return on assets can be calculated as follows

ROA= Net income/Total assets

= 40,556.6/575,000

= 0.0705×100

= 7.1%

Hence the return on assets is 7.1%

3 0
4 years ago
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