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4 years ago

The the existing spot price relative to the strike price, the valuable the call options will be.

Business

2 answers:

OLga [1]4 years ago

8 0

Answer:

The Higher the existing spot price relative to the strike price the more valuable the call options will be.

Explanation:

Spot price simply refers to how much a particular stock is trading in the market (that is, Market Price of the Stock).

Strike Price, also known as exercise price, is the price at which a person (corporate or individual) can purchase security.

Call options refers to the option to purchase an asset at an agreed price prior to/or at a particular day.

If for instance an employee is presented with Stock Options at a particular price, it will be more attractive for him or her if the price at which it is being offered is lower than it's actual market value. That way, he or she has already made a profit.

For example, if the spot price for the stock of Google is $2000/Unit and it is offered to an employee at $1450, if he elects to buy it at that time, he stands a chance to make $550 on each unit that if he sells whilst the spot price is still reasonable.

Cheers!

Brrunno [24]4 years ago

5 0

Answer:

The higher the existing spot price relative to the strike price, the less valuable the call options will be.

Explanation:

Call options refer to financial contracts in which the buyer of the option has the right, but not obligation, to buy asset or instrument at an already agreed price on or before a particular date. The particular date is also known as the expiration date.

The strike price is refers to the price at which a put or call option can be exercised on or before a particular date.

The spot price refers the current market price at which an instrument or asset is bought or sold now for immediate payment and delivery.

The relationship between the strike price and the spot price is that a call option is most valuable when the strike price is higher than the spot price. At this point, the call option is said to be in the money (ITM). On the other hand, a call option is least valuable when the strike price is lower than the spot price. At this point, the call option is said to be out of the money (OTM).

Based on the explantion above, therefore, the higher the existing spot price relative to the strike price, the less valuable the call options will be.

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The ________ stage of the new-product process assesses the total "business fit" of the proposed new product with the company's m

borishaifa [10]

Answer:

Business analysis

Explanation:

The business analysis refers to the analysis of the business i.e whether the product is profitable or not it contains the attributes that the company want and the consumer wants. It should be done with the help of marketing strategy and research by their taste and preference. Is this product fits with the company mission and objectives or not

So the given situation represents the business analysis stage

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3 years ago

On January 1, 2019, Woodstock, Inc. purchased a machine costing $40,000. Woodstock also paid $1,000 for transportation and insta

ruslelena [56]

Answer:

D. $6,000

Explanation:

The book value of a new asset includes the purchase price and other related costs that make it ready for use. For Woodstock company, the book value of the new machine will be the buying price of 40,000 plus 1000 transport costs.

Book value = $41,000

The straight-line depreciation method charges equal amounts throughout the life of the asset.

The depreciable amount = asset value - salvage value

=$41,000 - $5000

=$36,000

The depreciation rate = 1/6 x 100

=16.66 %

Annual depreciation = 16.66% x $36,000

=16.66/100 x $36,000

=0.16667 x $36,000

=$6,000

7 0

3 years ago

Ming Chen began a professional practice on June 1 and plans to prepare financial statements at the end of each month. During Jun

Leya [2.2K]

Answer:

The accounting equation holds as follows:

Asset = Liabilities + Equity = $80,000

Explanation:

Note: See the attached excel file for the analysis of the Effect of June Transactions on the Accounting Equation

From the last balances in the attached excel file, we have:

Assets = Cash + Receivable + Equipment = $41,000 + $8,000 + $31,000 = $80,000

Liabilities = Payable = $0

Equity = M. Chen, Capital - M. Chen, Withdrawals + Revenue - Expenses = $75,000 - $1,000 + $10,500 - $4,500 = $80,000

Liabilities + Equity = $0 + $80,000 = $80,000

Therefore, the accounting equation holds as follows:

Asset = Liabilities + Equity = $80,000

Download xlsx

4 0

3 years ago

John Inc. is a manufacturing business. For a given accounting period, the business’s total revenue amounted to $75,000, while it

maksim [4K]

Answer:

John Inc.'s return on equity for this accounting period is:

26.66 percent

Explanation:

Return or equity is a ratio used to calculate the efficiency of a certain business. It is calculated by dividing the net income on the stockholders' equity. Therefore, in our case, we translate this into 40 000 dollars divided into 150 000. Giving us a result of .26 %. Thus, the correct option is the B. option.

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3 years ago

Community Manufacturing Inc. developed the following standard costs for direct material and direct labor for one of their major

hammer [34]

Answer:

Particulars Standard Actual

Qty Rate Amount Qty Rate Amount

Materials 2,000 26 52,000 2,200 24 52,800

Labor 1,000 14 14,000 1,050 14.75 15,487.50

Actual output 10,000.00

Materials required (10000*0.20) = 2,000.00

Labor hrs required (10000*0.1) = 1,000.00

1. May's direct material price variance

= (SP-AP)*AQ

= (26 - 24*)2200

= 4,400 F

2. May's direct material quantity variance

= (SQ-AQ)*SP

= (2,000 - 2,200)*26

= 5,200 U

3. May's direct labor cost variance

= Standard Cost - Actual Cost

= 14,000 - 15,487.50

= 1,487.50 U

4. May's direct labor rate variance

= (SR-AR)*AH

= (14 - 14.75)*1,050

= 787.50 U

5. May's direct labor efficiency variance

= (SH-AH)*SR

= (1,000 - 1,050)*14

= 700 U

6 0

3 years ago

The ____ the existing spot price relative to the strike price, the ____ valuable the call options will be.

The the existing spot price relative to the strike price, the valuable the call options will be.