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
AnnZ [28]
3 years ago
5

Discount factor is 0.985. Stock XYZ is selling for $40 a share. An American option on this stock with a strike price of $38 is t

rading at $0.25 per share. If it is known that this option is priced above its intrinsic value, what type of option is it?
Business
1 answer:
weqwewe [10]3 years ago
5 0

Answer:

Put option

Explanation:

We have current price 40dollars - strike price 38dollars = $2. The question says the stock is trading at $0.25 per share. Since 0.25 is higher than 0 it is a put option. And the intrinsic value is $2.

The put option gives one the right to sell a particular number of shares at a price that has been set which is referred to as the strike price before a certain date.

You might be interested in
What are the three conditions for a market to be perfectly​ competitive? for a market to be perfectly​ competitive, there must b
den301095 [7]
The three conditions that must exist in order for a market to be perfectly competitive include: 1. a large number of vendors and customers (buyers and sellers), 2. the vendors must be selling identical products and finally, 3. new vendors must be able to freely enter the market.
7 0
3 years ago
Which of the following is true of variances? a.Unfavorable variances occur whenever actual prices or actual usage of inputs are
Marysya12 [62]

Answer:

B) Favourable Variances occur whenever actual prices or actual usage of inputs are greater than standard prices or standard usage.

Explanation:

Variances refer to the difference between actual and standard or budgeted costs. Standard cost is also referred to as budgeted cost. Budgeted costinh can be used by a food nutritionist to determine the food quantity he can cook as well as the ingredient amount which consists of the budgeted costs and the actual cost of preparing the food. Budgeted costchas a major advantage which is its ability to determine the pricing policy even before the product or service is delivered. When favourable or unfavourable variances are mentioned, it refers to the greater of budgeted or actual price or quantity. Favourable goes with a greater actual price or quantity while unfavorable or adverse goes with a greater standard price or quantity.

5 0
2 years ago
Read 2 more answers
What are two types of financial exchange
Stolb23 [73]

Credit card (Digital) and (physical) Which is with cash

3 0
2 years ago
Marion, the new supervisor, has requested the management to install survaillance cameras and voice recorders to monitor the prod
Kaylis [27]

Answer:

Explanation:

Marion, the new supervisor, has requested the management to install survaillance cameras and voice recorders to monitor the productive hours of the employees and supervise their work closely. This shows that marion has a managerial skills

7 0
3 years ago
If a household's income rises by 30%, its budget constraint will A) shift out parallel to the old one. B) pivot at the Y-interce
aliina [53]

Answer:

A

Explanation:

A budget constraint is a graph that shows all the combination of goods a consumer can consume given  current prices and income of the consumer.

If income increases, the budget constraint will  shift out parallel to the old

If income decreases, budget constraint will  shift in parallel to the old one.

6 0
2 years ago
Other questions:
  • What is a trap instruction? explain its use in operating systems?
    12·1 answer
  • MARKING BRAINLIST!!! THE NAMES HAVE TO BE REALLY GOOD!
    11·2 answers
  • Compute the 2019 standard deduction for the following taxpayers.a. Ellie is 15 and claimed as a dependent by her parents. She re
    15·1 answer
  • g Under Bonus Depreciation, which was part of the tax reform act under Trump’s administration, Taxpayers are allowed to claim 10
    15·2 answers
  • The dollar interest received divided by the market price of the bond is called the:________.
    10·1 answer
  • Kevin and Bob have owned and operated SOA as a C corporation for a number of years. When they formed the entity, Kevin and Bob e
    13·1 answer
  • Georges Bank, a highly productive fishing area off New England, can be divided into two zones in terms of fish population. Zone
    15·1 answer
  • Inferior company sells products that are poorly made. jack, who has never bought an inferior product, files a suit against infer
    10·1 answer
  • working capital is defined as A. All assets available for sale after long term debt is paid off. B. The assets that the company
    11·1 answer
  • a broker sold a property that was owned by a bank that had acquired it through foreclosure, and the broker received a 6.5% commi
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!