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xxTIMURxx [149]
3 years ago
7

A stock price is currently $100. Over each of the next two six-month periods it is expected to go up by 10% or down by 10%. The

risk-free interest rate is 8% per annum with continuous compounding. What is the value of a one-year European call option with a strike price of $100?
Calculate the price of a three-month European put option on a non-dividend-paying stock with a strike price of $50 when the current stock price is $50, the risk-free interest rate is 10% per annum, and the volatility is 30% per annum.

Business
1 answer:
butalik [34]3 years ago
4 0

Answer:

Please see attachment

Explanation:

Please see attachment

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Suppose the exchange rate is 90 yen per U.S. dollar and the United States wants to keep the exchange rate at a target rate of 90
ikadub [295]

Answer:

Option A, buys dollars to raise the exchange rate, is the right answer.

Explanation:

Option A is correct because when the Fed will buy the dollars then only the demand for dollars will shift rightwards. Consequently, the dollar price or exchange rate will go up. Therefore, the Fed will buy the dollars to increase the exchange rate. In another case, if the Fed wants to decrease the exchange rate then it will sell the dollars, and selling of dollars will shift the supply rightwards. Thus, the exchange rate will fall.

6 0
2 years ago
Aiello, Inc. had the following inventory in fiscal 2016. The company uses the LIFO method of accounting for inventory. Beginning
quester [9]

Answer:

The correct answer is B. $1,800.00

Explanation:

LIFO Perpetual table is attached.

The table shows purchases, sales and balance of each period.

As the final inventory is 120 units, we suppose the sales of the year.  Applying LIFO,  our ending inventory cost is 120 units, each one at $15

So,  total cost is $1800 (120* 15)

Download xlsx
8 0
3 years ago
How much manufacturing overhead was incurred during the​ year? Is manufacturing overhead underallocated or overallocated at the
professor190 [17]

Answer:

1. Overhead incurred during the year;

= Depreciation on manufacturing plant and equipment + Property taxes on plant + Plant Janitors wages

= 485,000 + 19,000 + 9,500

= $513,500

2. The under or over allocation depends on how much manufacturing overhead was allocated to jobs for the year.

= Actual machine hours * Overhead rate

Overhead rate = Manufacturing overhead cost / Allocated Machine hours

= 570,000 / 71,250

= $8

Allocated Manufacturing Overhead = 57,000 * 8

= $456,000

The allocated manufacturing overhead is more than the actual overhead. This means that it is Underallocated and the company did not budget enough for the overheads.

Underallocation = 513,500 - 456,000

= $57,500

6 0
3 years ago
Douglas International consistently estimated its bad debt expense at 2 percent of credit sales. In 2020, however, Douglas determ
Anastaziya [24]

Answer: $420,000 of expense in the income statement as an ordinary item. Douglas’ accounts for this change in estimate in the period of change by reporting the newly calculated amount of bad debt expense as an ordinary item of income. Changes in estimate are not considered an extraordinary item, an error correction, or a change in accounting principle.

4 0
2 years ago
An owner had a profit margin of 50,000 last year. She expects to recieve 1,168,000 from sponsorships this year with no additiona
FromTheMoon [43]
1168000 + 50000 = 1218000
1218000 will be his estimated profit margin for the upcoming year.


I hope it helped you!
7 0
3 years ago
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