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Law Incorporation [45]
3 years ago
13

The exercise price of the options is $100 per share, all options are European, and the stock does not pay any dividend. The call

price is $25 per share and the put price is $17 per share. Both options mature in 2 years. Finally, the annual rate of interest is 5% with continuous compounding. What is the stock price today?
Business
1 answer:
defon3 years ago
3 0

Answer:

Stock Price is $98.70

Explanation:

given data

exercise price = $100 per share

call price = $25 per share

put price = $17 per share

mature time = 2 years

annual rate of interest = 5%

to find out

What is the stock price today

solution

we will use here Put Call Parity for find out Stock Price that is express as

C + \frac{100}{(1+r)^t} = S + P    .....................a

we know here that C is call price and r is rate and t is time and S is Stock Price and P is put price

so put all value in equation a

C + \frac{100}{(1+r)^t} = S + P

25 + \frac{100}{(1+0.5)^2} = S + 17

solve it we get

P = $98.70

so Stock Price is $98.70

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The addition of acceptance criteria factors to the milestone schedule in a project charter helps the team understand who will ju
tester [92]

Answer: The criteria or standards they will use.

Explanation: Project Charter is a major component of project management system,the project charter Describes the roles and responsibilities of the team members,the task descriptions,the time lines,it is an important and reference for both present and future projects.

The project Charter also sets the project deliverables with each mile stone,the criteria and standards through which the project deliverables associated with each milestone will be judged.

4 0
3 years ago
Blue Spruce Company had $152,600 of net income in 2016 when the selling price per unit was $153, the variable costs per unit wer
Sonbull [250]

Answer:

12098

13127

Explanation:

Net income = revenue -  total cost

revenue = price x unit sold

total cost = variable cost + fixed cost

variable cost = variable cost per unit x unit sold

unit sold is unknown, so it would be represented with a

$152,600 = $153a - ($93a + $573,300)

$152,600 = $153a - $93a - $573,300

Collect like terms and solve for a

a = 12,098

b. Net income in 2017 = $61,700 + $152,600 = 214,300

214,300 = $153a - $93a - $573,300

Collect like terms and solve for a

a = 13127

6 0
3 years ago
Which of the following statements is (are) false?(A) Operations costing accounts for material costs like job costing and convers
Airida [17]

Answer:

C. Both A and B

Explanation:

Operation Costing:

is the acccount of process costing until there is a split-point when the costing systems moves to job system.

This means the materials are calculate with calculate with process costing. And then there is a degree of customization which makes the job costing useful.

(A) FALSE is the other way around. The system use process costing until split point, when it switch to job costing for specific procedures.

(B) FALSE

An automobile manufacturer do the same car over and over.

There is no difference between the car. It will use process costing.

6 0
3 years ago
Suppose you observe the following situation: State of Economy Probability of State of Economy Rate of Return if State Occurs Sto
klio [65]

Answer:

C. 7.81%

Explanation:

Stock A and Stock B expected Return shall be calculated using the following formula:

Stock A/B expected [email protected]*Return at [email protected]*Return at [email protected]*Return at Recession.

Stock A return=0.21*18.9%+0.74*15.8%+0.05*-24.6%

                       =14.43%

Stock B return=0.21*9.7%+0.74*7.6%+0.05*4.2%

                       =7.87%

Market risk premium=(Stock A Return- Stock B return)/0.84

Market risk premium=(14.43%-7.87%)/0.84=7.81%

So Based on the above explanation, the answer shall be C. 7.81%

6 0
3 years ago
Mike and Lon came to a party together. A friend offered Mike a ride home. However, there was no room in the car for Lon. What ar
Vikentia [17]
Mike could leave lon behind, walk lon home, offer to pay for a taxi or finally he could stay with him.

3 0
3 years ago
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