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
svp [43]
3 years ago
13

You have purchased one call option expiring in one year with a strike price of $40. The current price of the underlying is $30,

the interest rate is zero, and the premium for the call option is $2.63.
(1) Draw the payoff and P&L diagrams for the call option at expiration.
(2) What is the P&L on the option at expiration if the underlying is $57.50 (i.e. S, = 57.5)?
Business
1 answer:
nydimaria [60]3 years ago
6 0

Answer:

Explanation:

2)

Calculation of P&L

Underlying Price = $ 57.70

Underlying Price is more than exercise price (40) ⇒ the option is exercised.

Initial Cash Flow = - $ 2.63

Cash Flow at Expiration = $ 57.70 - $ 40 = $ 17.70

Prrofit = $ 17.7 - $ 2.63 = $ 15.07

You might be interested in
A man, described to be a white male, 20-30 years old, average height, robbed a store by using a gun and covering his face with a
arlik [135]

The key factor is the description of the vehicle, making this case highly solvable.

Progress in crime lab methods and PC innovation are helping the police to find vehicles associated with violations. Because of new forensic devices, even modest bits of a car, or a faint impression from a tire tread, can limit the rundown of suspect vehicles. The police would then be able to cross-reference that data with data in the region and examine a subset of autos. In the given case we have a load of information about the car used which can easily lead to the criminal.

6 0
3 years ago
What is the difference between durable and nondurable goods?
sleet_krkn [62]

Answer:durable goods are products that do not need to be purchased often, whereas non-durable goods are products that expire more quickly.

Explanation:

4 0
3 years ago
Read 2 more answers
Market offerings are some combination of products, services, information, or experiences offered to a market to satisfy a need o
Rufina [12.5K]

Answer:

True

Explanation:

Market offerings can be defined as a company's complete offer to its customers and target market, including the product it sells, delivery, technical support, etc.  

Market myopia happens when the company has an inward looking approach, the company wants to sell what they produce, not what consumers' need and want. This will eventually lead to business failure since the company will not be able to adapt to market changes, e.g. Nokia insisted on manufacturing regular cellphones instead of smartphones because it was the world leader in the manufacturing of regular cellphones.

4 0
3 years ago
Increasing the federal tax on gasoline would cause shipping costs in the United States to​ increase:________
GalinKa [24]

Answer:

Positively

Explanation:

In the e-commerce sector, consumers would often feel the effects of an increase in Federal gas tax since the shipping cost of products they purchase would be based on the prices of gasoline.

In effect, retailers of these products would transfer the increased shipping cost of this products resulting from higher gas tax to the consumers.

7 0
3 years ago
A company in Mexico recently agreed to trade coal to an American importer in return for American-made cars. This arrangement is
Alex777 [14]

Answer:

barter

Explanation:

Barter system -

In this type of system , there us exchange of goods and commodities , without the use of any monetary value like money , is referred to as barter system .

When money system was not introduced , barter system was used , where people used to exchange the goods depending on the needs of each other .

Barter system is based on the bilateral basis.

Hence , from the given scenario of the question,

The correct term is barter.

6 0
3 years ago
Other questions:
  • In preparing its bank reconciliation for the month of April 2020, Henke, Inc. has the following information available. Balance p
    7·1 answer
  • During Year 1, Hardy Merchandising Company purchased $24,000 of inventory on account. Hardy sold inventory on account that cost
    13·1 answer
  • Magnet Dot, a printer manufacturing company, set up a website to enable its customers to place orders online. It also set up an
    6·1 answer
  • In 1985, the exchange rate between the U.S. dollar and the Japanese yen was $1 = 262 yen; in 2003, the rate was $1 = 110 yen. Wh
    13·1 answer
  • Roth Service Co. experienced the following transactions for 2018, its first year of operations: Provided $80,000 of services on
    10·1 answer
  • Huojin is developing a pricing strategy for his​ start-up company. He decides to introduce the new product at a relatively high​
    7·1 answer
  • The Federal Reserve Board foresees the probability of an overheated economy and the resumption of double-digit inflation. Theref
    6·1 answer
  • Which of these is NOT an example of price discrimination? retirees getting a discount at a local movie theater soup companies se
    15·1 answer
  • Where is the most common workplace for people in the finance cluster?
    11·2 answers
  • Economics (FoolProof)
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!