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Likurg_2 [28]
3 years ago
11

Ms. Z has decided to invest $75,000 in state bonds. She could invest in State A bonds paying 5 percent annual interest or in Sta

te R bonds paying 5.4 percent annual interest. The bonds have same risk , the interest from both is exempt from federal income tax. Because Ms. Z is a resident of State A , she would not pay State A's 8.5 percent personal income tax on the State A bond interest, but she would pay this tax on the State R bond interest .Ms. Z can deduct any State tax payments in the computations of her federal taxable income , and her federal marginal rate is 33 percent. Should Ms. Z invest in the State A or State R bonds?
Business
1 answer:
rodikova [14]3 years ago
7 0

Answer:

Ms. Z should invest in the State A.

Explanation:

Coupons from State A = (1 - 0.33)*0.05*75000

                                      = 2512.5

Coupons from State R = (1 - 0.33 - 0.085)*.054*75000

                                     = 2369.25

Therefore, Ms. Z should invest in the State A .

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You bought four put options (each on 100 shares) on EZ stock with an exercise price of $35 per share and an option price of $1.3
Stella [2.4K]

Answer:

-$ 540

Explanation:

Put Option - provides right to sell share at exercise price on expiry.

As it is an Right not Obligation, Thus, buyer will exercise the right only if he is gaining at expiry and he will gain only if exercise price is higher than spot price at expiry

In this case Exercise Price ($ 35) is lower than the spot price ( $ 36.25) at expiry. Thus he will not execrise the option.

He will lose all what he spend in buying option that is $ 1.35 per share

Thus,

Net profit or loss on this investment = 4 Options * 100 Shares each * Loss of $ 1.35 per Share

Net profit or loss on this investment = 4 * 100 * (-1.35)

Net profit or loss on this investment = -$ 540

4 0
3 years ago
Suppose VS's stock price is currently $20. A six-month call option on VS's stock with an exercise price of $15 has a value of $7
lutik1710 [3]

Answer: $1.43

Explanation:

To solve this, we would use the put call parity. We then calculate the value of the out which will be:

= $7.14 + $15/(1 + 5%) - $20

= $7.14 + $15/(1 + .05) - $20

= $7.14 + $15/(1.05) - $20

= $7.14 + $14.29 - $20

= $1.43

The price of an equivalent put option is $1.43

3 0
2 years ago
Marvin Corporation has the following information reported on the balance sheet as of December 31, 2017 Common Stock, $10 par val
SCORPION-xisa [38]

Answer:

  • How many shares of common stock are outstanding?

C. 3,000

Explanation:

Treasury stock, are those that the company repurchase from the market and keep it in the company, in this case the company keep the shares in the accounting and the shares could be reissued in the future.

The company issued 9,000 shares, it is reflected in the Common Stock account,  $90.000 / $10 = 9,000.

Then in the Treasury Stock account are registered the shares that the company repurchases from the market, these are, 6,000 shares.

Finally the total Common Shares outstanding are 3,000.

3 0
3 years ago
Kevin bought 265 shares of Intel stock on January 1, 2019, for $76 per share, with a brokerage fee of $165. Then, Kevin sells al
garri49 [273]

Answer:

$2800

Explanation:

To find the Gain or loss on the sell of shares we jus need to deduct cost of purchasing and brokerage fee from sale proceeds

12 DECEMBER 2019

Gain/loss = Sales proceeds- Total Cost to purchase - Cost to sell

Gain/loss= ($88 x 265) - $20,305 - $215

Gain/loss= $23,320 - $20,305 - $215

Gain/loss= $2800

WORKINGS

Purchase 1 Jan 2019

265shares x $76per share =  $20,140

Total cost to purchase = $20,140 + $165(brokerage fee)

Total cost to purchase =  $20,305

Cost to sell = $215(brokerage fee)

3 0
3 years ago
A Nasdaq-listed stock currently shows an inside market of 15.50 - 15.75, 10 x 10. A broker-dealer that is not a market maker in
tresset_1 [31]

Answer:

cross trade

Explanation:

In simple words, A cross trade can be understood as a transaction  when purchase and sell requests for the identical instrument are balanced alone without transaction being recorded on the market. Whenever a stockbroker performs matching buy and sell transactions for about the exact securities across several customer accounts plus reports these on an interchange, this is known like a cross transaction.

8 0
3 years ago
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