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salantis [7]
3 years ago
10

Assume the spot Swiss franc is $0.7000 and the six-month forward rate is $0.6950. What is the minimum price that a six-month Ame

rican call option with a strik-ing price of $0.6800 should sell for in a rational market
Business
1 answer:
Rama09 [41]3 years ago
4 0

Answer:

2 cents

Explanation:

The spot price = $0.7000 = 70 cents, The forward rate = $0.6950 = 69.5 cents and the call option with striking price = $0.6800 = 68.00 cents

The annualized six month rate = 3 1/2 % = 3.5 %, therefore the rate = r/n, where n is the number of period per year = 2. Therefore r/n = 3.5% / 2 = 0.035 / 2 = 0.0175

The minimum price = Maximum (spot price - striking price, (forward rate - striking price) / (1 + 0.0175), 0) = Maximum(70 - 68, (69.5 - 68)/ 0.0175, 0)

Minimum price = Maximum (2 , 1.47, 0) = 2 cents

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Question 25
telo118 [61]

Answer:

False

Explanation:

6 0
3 years ago
A researcher conducts a survey of people who use anxiety medications, recruited through an advertisement in the local paper. the
Darya [45]
<span>The researcher has violated participant confidentiality and has made the validity of the study invalid. The people whose confidentiality was breached should be notified and they should have the right to revoke their information from the study. No one who believes they have participated with confidentiality should be subjected to having others know they were involved if they do not want that.</span><span />
3 0
3 years ago
Audreys free-throw percentage so far this season is .875. If she makes only 13 of her next 20 free throws, her percentage will d
otez555 [7]

Answer:

245 free throws

Explanation:

x will be number of times Audreys makes a shot, and let y be total number of the shots.

x/y = .875

(x+13)/(y+20) = .860

Let solve for x in equation 1

x = .875y

We will plug the for x in the equation 2

(.875y+13)/(y+20)

= .860

.875y + 13

= .860y + 17.2

.015y = 4.2

y = 280

Audreys has taken 280 shots.

We will Plug that back into the equation 1 in order to find out how many Audreys made.

x/280 = .875

x = 245

Hence :

Audreys made 245 free throws

6 0
3 years ago
On February 1, you bought 100 shares of stock in the Francesca Corporation for $42 a share and a year later you sold it for $46
Luden [163]

Answer:

12.381%

Explanation:

For computing HPY and HPR, the formula is same which is given below:

The formula to compute the HPY is shown below

= Dividend income + (Selling price - purchase price) ÷ purchase price

= ($1.20 + $46 per share - $42 per share) ÷ $42 per share

= ($1.20 + $4 per share)  ÷ $42 per share)

= $5.20 per share ÷ $42 per share

= 12.381%

6 0
3 years ago
Andrew, a project manager in a multinational company, accepts a very challenging project from his client as he feels that the em
shepuryov [24]

Answer:

Theory Y

Explanation:

In theory Y, managers have a positive and optimistic view of their employees.  They assume employees are happy to work and that workers are motivated by attaining objectives.  In theory Y, employees can work towards organizational goals through self- direction and self-control.

Theory Y assumptions allow employees to participate in solving organization problems. The managers consider employees are creative, imaginative and innovative people.  In theory Y, managers adopt a consultative style of management.

5 0
3 years ago
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