1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Reil [10]
3 years ago
9

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

Business
2 answers:
OLga [1]3 years ago
8 0

Answer:

The <u>Higher</u> the existing spot price relative to the strike price the <u>more </u>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]3 years ago
5 0

Answer:

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

You might be interested in
Which activity is a good practice when selling online media?
nikdorinn [45]

Answer:

For Plato the answer is D: Avoid quoting too high a price.

Explanation:

I got it right

4 0
3 years ago
How will the rapo rate cut affect the economy?​
jeka94

Answer:

The decrease in repo rates is to aim at bringing in growth and improving economic development in the country. Consumers will borrow more from banks thus stabilizing the inflation. A decline in the repo rate can lead to the banks bringing down their lending rate

3 0
3 years ago
Shawn will pay Craig with a negotiable instrument, and Shawn plans to involve a third party in that process. What instrument sho
masha68 [24]

The instrument that Shawn must use is “payable to the order of” before the name of the payee.

<h3>Requirements of Negotiability </h3>
  • The first of the four major considerations is whether or not a paper is negotiable, and it is one that nonlawyers must address.
  • Auditors, retailers, and financial institutions frequently handle notes and checks and must make quick decisions about negotiability.
  • In a negotiable instrument, the only permissible promise or direction is to pay a particular sum of money. Any other promise or command renders negotiability null and void
  • This restriction exists to prohibit an instrument from having an uncertain value.
  • If the bearer of a negotiable instrument had to examine whether a provision or condition had been met before the thing had any value, the utility of the object as a substitute for money would be severely diminished.

Hence, the instrument that Shawn must use is “payable to the order of” before the name of the payee.

To learn more about the Negotiation instrument refer to:

brainly.com/question/9312091

#SPJ4

5 0
2 years ago
Which is an example of a cultural block?
jonny [76]
Example its the best in the world hope i helped
8 0
3 years ago
Which of the three limitations of the Payback Rule can be overcome with a modification to it? Gives equal weight to all cash flo
gogolik [260]

Answer:

Gives equal weight to all cash flows arriving before the cutoff 

Explanation:

The payback period measures how long it takes for the amount invested in a project to be recovered from a project.

A project with a shorter pay back period is favoured over projects with longer payback periods.

The payback period gives equal weights to all cash flows before arriving at a cut Off. The discounted payback period remedies this by discounting cash flows.

I hope my answer helps you

7 0
3 years ago
Read 2 more answers
Other questions:
  • Diverse Diversions, Inc., makes video, games. Ember buys a copy of Final Infinity. Inside the package is a shrink-wrap agreement
    9·1 answer
  • Dyan, the owner of expert restoration services, inc., adheres to the "principle of rights" theory. under this theory, a key fact
    6·1 answer
  • Before the year​ began, Butler Manufacturing estimated that manufacturing overhead for the year would be​ $176,400 and that​ 13,
    11·1 answer
  • Elana works an average of 60 hours each week. she wants to have a great work-life balance. how can she improve her social/emotio
    11·1 answer
  • Julia​ Paul, an analyst at a research​ institute, lives very close to her office and walks to work every day.​ Meanwhile, her​ c
    5·1 answer
  • Can someone tell me if this answer is correct? I’ll give you brainliest points
    6·1 answer
  • A company should immediately recognize: any gain when it constructs a piece of equipment at a cost savings. any gain when it mak
    8·1 answer
  • Cross Town Express has sales of $137,000, net income of $14,000, total assets of $98,000, and total equity of $45,000. The firm
    9·1 answer
  • Brenda is the owner of a spa store that operates 50 weeks per year. Spair Shampoo is a high margin stock-keeping unit (SKU), but
    12·1 answer
  • What is the distinguishing feature of a market structure with monopolistic competition?
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!