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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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"Roger has just lost a lawsuit and has agreed to make equal annual payments of $14,200 for the next 8 years with the first payme
german

Answer:

26.22

Explanation:

Total Payments = $14,200 X 8 Instalments

=$113,600

Interest = Total Payments - Initial Liability

= $113,600 - $90,000 = $23,600

Interest Rate = $,23,600/$90,000X 100

=26.22%

5 0
3 years ago
Suppose that in 1994 the total output in a single-good economy was 10,000 buckets of chicken. Also suppose that in 1994 each buc
maxonik [38]

Answer:

a. The GDP price index for 1994, using 2015 as the base year is 62.5.

b. Percentage rise the price level between 1994 and 2015 is 60.0%.

c. We have:

Real GDP in 1994 = $160,000

Real GDP in 2015 = $352,000

Explanation:

Note: The requirements of this question is not complete. The complete requirements of the question are presented before answering the question as follows:

a. What is the GDP price index for 1994, using 2015 as the base year

b. By what percentage did the price level, as measured by this index, rise between 1994 and 2015?

c. What were the amounts of real GDP in 1994 and 2015?

Explanation of the answers is now given as follows:

a. What is the GDP price index for 1994, using 2015 as the base year

GDP price index for 1994 = (Price of a bucket of chicken in 1994 / Price of a bucket of chicken in 2015) * 100 = ($10 / $16) * 100 = 62.5

b. By what percentage did the price level, as measured by this index, rise between 1994 and 2015?

Percentage rise the price level between 1994 and 2015 = ((100 - GDP price index for 1994, using 2015 as the base year) / GDP price index for 1994, using 2015 as the base year) * 100 = ((100 - 62.5) / 62.5) * 100 = 60.0%

c. What were the amounts of real GDP in 1994 and 2015?

Since 2015 is being used as the base year, we have:

Real GDP in 1994 = Number of buckets of chicken produced in 1984 * Price per bucket of chicken in 2015 = 10,000 * $16 = $160,000

Real GDP in 2015 = Number of buckets of chicken produced in 2015 * Price per bucket of chicken in 2015 = 22,000 * $16 = $352,000

4 0
3 years ago
Although True Ion Inc. and One Electro Inc. operate in the same consumer electronic industry, True Ion Inc. has better sales and
Degger [83]

Answer:

The correct answer is B. resource heterogeneity.

Explanation:

The theory of resources and capabilities states that organizations are different from each other based on the resources and capabilities they have at a given time, as well as the different characteristics of the same and that these resources and capabilities are not available to all companies Under the same conditions. This theory allows us to direct the internal analysis towards the most relevant aspects of the social interior of the organization, in relation to the external analysis performed and as a basis for the general strategic approach and subsequent human resources. It is also a tool that allows you to determine the internal strengths and weaknesses of the organization. And according to this theory, the only way to achieve sustainable competitive advantages is through the development of distinctive capabilities.

7 0
3 years ago
Which of the following is an example of a shortage?
Lemur [1.5K]

Answer:

Consumers cannot find enough of a popular new toy in stores.

Explanation:

If there is a shortage, there is not enough supply for the demand.

3 0
3 years ago
A company invests $40,000 in a project with the following net cash flows: Year 1: $3,000 Year 2: $8,000 Year 3: $14,000 Year 4:
hram777 [196]

Answer:

the payback period is 3.34 years

Explanation:

The computation of the payback period is as follow;

Given that

Year       Cash flows         Cumulative cash flows

0             -$40,000           $-40,000

1               $3,000              $3,000

2              $8,000              $11,000

3              $14,000             $25,000

4              $19,000             $44,000

5              $22,000            $66,000

6               $28,000           $94,000

Now the payback period is

= 3 years +  ($40,000 - $25,000) ÷ $44,000

= 3 years + 0.34

= 3.34 years

Hence, the payback period is 3.34 years

8 0
3 years ago
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