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
Vera_Pavlovna [14]
3 years ago
9

Suppose you purchase twelve call contracts on Macron Technology stock. The strike price is $65, and the premium is $2.30. If, at

expiration, the stock is selling for $71 per share, what are your call options worth? What is your net profit? (Omit the "$" sign in your response.)
Business
2 answers:
umka2103 [35]3 years ago
8 0

Answer:

Call option worth = $6

Net Profit = $3.70

Explanation:

The strike price of the option is $65

The amount of premium = $2.30

The selling price = $71

Call option worth = Current Price - Strike price

Call option worth = $71 - $65

Call option worth = $6

Net Profit = Selling Price - (Strike price + Premium)

Net Profit = $71 - ($65 + $2.30)

Net Profit = $71 - $67.30

Net Profit = $3.70

erma4kov [3.2K]3 years ago
3 0

Answer:

Call option worth = 6

Net profit = 3.7

Explanation:

Call option worth and net profit can be calculated as follows

DATA

Strike price = 65

Premium = 2.30

Selling price = 71

Call option worth =?

Net profit =?

Requirement A: Call option worth

Solution

Call option worth = Selling price - strike price

Call option worth = 71 - 65

Caall option worth = 6

Requirement B Net profit

Solution

Net profit = Selling price - (Strike price + Premium)

Net profit = 71 - (65 + 2.3)

Net profit = 71 -67.3

Net profit = 3.7

You might be interested in
The portfolio with the lowest standard deviation for any risk premium is called the_______. A.efficient frontier portfolio B.CAL
Kryger [21]

Answer:

The right approach is Option C (global minimum variance portfolio).

Explanation:

  • A completely-invested portfolio with either a low uncertainty factor seems to be the GMV portfolio. This same GMV portfolio corresponds to or is situated mostly on the left end including its FI-efficient frontier.
  • Although aside from either the full-investment requirement, no restrictions are enforced, the GMV portfolio deals for analytical portrayal.

The latter options offered are not relevant to something like the scenario presented. So that is indeed the correct solution.

7 0
3 years ago
Barnes Enterprises has bonds on the market making annual payments, with 17 years to maturity, a par value of $1,000, and a price
Eva8 [605]

Answer:

7.76%

Explanation:

In this question, we use the PMT formula which is shown in the spreadsheet.  

The NPER represents the time period.

Given that,  

Present value = $969

Future value = $1,000

Rate of interest = 8.1%

NPER = 17 years

The formula is shown below:

= PMT(Rate;NPER;-PV;FV;type)

The present value come in negative

So, after solving this, The PMT would be $77.58

The coupon rate is shown below:

= (Coupon payment ÷ par value) × 100

= ($77.58 ÷ $1,000) × 100

= 7.76%

5 0
3 years ago
The academic calendar for a university is August 15 through May 15. A professor commits to a contract that binds her to a teachi
tatiyna

Answer:

A. Will be the nine month period between August 15 and May​ 15; any time period longer than this will be long run for her.

6 0
3 years ago
Henry's savings account has an APR of 3.65%
Kisachek [45]

Answer:

and Leah is saving her account APR of

5 0
3 years ago
The marginal principle of retained earnings means that each potential project to be financed by retained earnings must:
Sedaia [141]

Answer:

The correct answer is D

Explanation:

Marginal principle is the principle which is referred to an increase in the activity level when the marginal advantage exceeds or more than the marginal cost.

So, the marginal principle of retained earnings would be when it will provide the higher rate of  return than the shareholders who could achieve after paying taxes on the dividends.

3 0
3 years ago
Other questions:
  • Waterproof Roofing Company has provided the following​ information:
    14·1 answer
  • ________ determines the criteria for supplier selection and adds and removes suppliers from the list of approved suppliers. The
    7·2 answers
  • LaRoe Lawns’ inventory increased during the year by $6.7 million. Its accounts payable increased by $6.6 million during the same
    12·1 answer
  • Demand for a product is​ 12,000 units per year. Every time an order is​ made, the company must pay​ $15.00 per order. The cost t
    10·1 answer
  • Klapper Company claimed a tax deduction which was uncertain when it was deducted in 2018 but is relatively certain of receiving
    11·1 answer
  • What is the rationale behind the ceiling when applying the lower-of-cost-or-market method to inventory?
    10·1 answer
  • Is the creation of real or perceived differences in goods or services.
    12·1 answer
  • A large bakery buys flour in 25-pound bags. The bakery uses an average of 1,215 bags a year. Preparing an order and receiving a
    9·1 answer
  • Compute predetermined overhead rates and explain why estimated overhead costs (rather than actual overhead costs) are used in th
    13·1 answer
  • a segregation of duties among employees always eliminates the possibility of collusion. group of answer choices true false
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!