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kow [346]
3 years ago
14

Reconsider the determination of the hedge ratio in the two-state model where we showed that one-third share of stock would hedge

one option. The possible end-of-year stock prices, uS0 = $135 (up state) and dS0 = $92 (down state).
What would be the hedge ratio for each of the following exercise prices: 135, 122, 112, 92? (Round your answers to 3 decimal places.)

Exercise Price Hedge Ratio
135
122
112
92
Business
1 answer:
alexgriva [62]3 years ago
7 0

Answer:

Upper state  = 135

Down State  = 92

Difference = 135-92= 43

<u>Exercise Price</u>                      <u>Hedge Ratio </u>

135                                       0/43 = 0.0000

122                                        13/43 = 0.302

112                                         23/43 = 0.535

92                                          43/43 = 1.000

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The establishment of lobster fishing season in the state of Florida is an example of:
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Answer:

Government intervention in the economy.

Explanation:

The government in some cases take actions that affect the economy to have an impact and address inefficiencies. In this case, the intervention takes the form of a regulation that establishes a lobster fishing season in the state of Florida. Because of that, the answer is that this is an example of government intervention in the economy.

5 0
3 years ago
Drying times for newly painted microwave oven cabinets are normally distributed with a mean of 2.5 minutes and a standard deviat
Marina86 [1]

Answer: 3.22

Explanation:

Given that;

mean = 2.5 min

standard deviation = 0.25 min

now to get the value of X required, we say

z = (x - u) / a

where z is the distance from the mean measured in the standard deviation units, x is the value we are interested in, u is the mean distribution, a is the standard deviation of the distribution.

the time delay should be just enough to allow 99.8% of the cabinets to dry completely = 99.8/100 = 0.9980

first we determine an appropriate z value.

Using the standardized normal tables,

value of z for approximately 0.9980 is 2.88

so using our initial equation z = (x - u) / a

we substitute the value

z = (x - u) / a

2.88 = ( x - 2.5) / 0.25

2.88 * 0.25 = x - 2.5

0.72 = x - 2.5

x = 0.72 + 2.5

x = 3.22

5 0
3 years ago
When a company maintains its price but removes or prices separately one or more elements that were part of the former offer, suc
fomenos

The name which is given to the process when a company maintains its price but removes or prices separately is known as E. unbundling

<h3>What is Price?</h3>

This refers to the attached value which is given to a good or service that is exchanged for that particular value.

Hence, we can see that when a company removes freebies such as free delivery or installation but maintains its price is known as unbundling and is a market activity.

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2 years ago
BP ignored some safety regulations in order save $1 Million per day on the Horizon Deep Water Drilling Platform. How much did th
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Ignoring some safety regulations in order save $1 Million per day. The amount that  those violations end up costing the company is $100 Billion.

<h3>What is safety regulation?</h3>

Safety regulation can be defined as a set of rules and regulation that an employees are mandated to follow so as to prevent work hazard.

Based on the given scenario ignoring the safety regulation so as to save $1 million per day  will cost the company $100 Billion.

Which is why companies made it compulsory for employees to follow the saftey standard set so as to ensures that employees work in a safe and conducive environment .

Inconclusion the amount that  those violations end up costing the company is $100 Billion.

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2 years ago
Smart businesses in all industries use data to provide an intuitive analysis of how they can get a competitive advantage.
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Answer:

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