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valkas [14]
3 years ago
6

You own a European put option with 1 month to expiration and with strike price 50, the stock is currently trading at 45, and the

riskless interest rate is 5%. What is the intrinsic value of the put?
Business
1 answer:
Lostsunrise [7]3 years ago
7 0

Answer: 5

Explanation:

The answer is quite straight forward. Intrinsic value provides you with the right to exercise the option now.

Here, European put option strick price is 50 and stock is current trading at 45. When you subtract it (50 - 45) you get = 5.

The intrinsic value of the European put is 5.

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When comparing a 10-year bond versus a 1-year bond, the 10-year bond has a much greater interest rate risk. True or false?.
ValentinkaMS [17]

True,When comparing a 10-year bond versus a 1-year bond, the 10-year bond has a much greater interest rate risk

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A bond is a sort of financial security in which the issuer owes the bearer a debt and is obligated to repay the principle of the bond as well as interest over a specified period of time, depending on the terms. Interest is normally paid at regular intervals.

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5 0
2 years ago
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butalik [34]

The correct answer is A) has advantages over commodity-backed money.

Fiat money has advantages over commodity-backed money.

There was a time when money in the United States was backed by gold. Not any more. Fiat money, as the US dollar is backed by the US government, This is the case in other countries, For instance, the European Union's currency, the Euro, is also fiat money. Governments issue fiat money through their central banks and can exert certain kinds of control on it.

4 0
3 years ago
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kari74 [83]

Answer:

See explaination for the details of the answer.

Explanation:

1) Increase

As business is optimistic about its future, such business will start capacity expansion to cater for consumer demand.

2) Decrease

Higher real interest rate simply means borrowing cost is higher for the firms and so that they will reduce the investment in respose to that.

3) Decrease

A lower tax means higher profits and firms can pass these benefits to consumers with lower prices, to employees with higher wages and to the government with tax on profit. However, if the rate of tax itself has been increased then in that case corporates will see higher tax as a dampener in sentiments and they might curtail investment plans.

4) Decrease

A recession means there will be lesser economic activity overall and demand will be lower so as the consumption. In such case, planned investment will be reduced.

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artcher [175]
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