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Rudik [331]
3 years ago
11

An American-style option with six months to maturity has a strike price of $42. The underlying stock now sells for $50. The call

premium is $14.
a. If the company unexpectedly announces it will pay its first-ever dividend four months from today, you would expect that:

1. the call price would increase.
2. the call price would decrease.
3. the call/put price would not change.
4. the put price would decrease?

b. What is the intrinsic value of the call?
c. What is the time value of the call?
Business
1 answer:
Dmitriy789 [7]3 years ago
4 0

Answer:

(a) The call price would decrease (b) $8 per share (c) $6 per share

Explanation:

Solution:

The Call option is the right to sell a specified security at a specified price on a future date.

(a) The value of call option/ price  will decrease

Since after payment of dividend, the market price of share will decrease

Hence, value of call option will decrease

(b)The Intrinsic Value = Market Price - Strike price

= $50 - $42

= $8 per share

(c)The time Value = Option Premium - Intrinsic Value

= 14-8

= $6 per share

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V125BC [204]
Unsafe because you dont interlock them or sercure them therefore it could fall over hurt you or someone else standing by

3 0
3 years ago
the deployment time of an airbag should be between 21 and 27 milliseconds and their current average is 22 milliseconds with a st
alekssr [168]

Answer:

4.00

Explanation:

Given:

Upper Specification Limit, USL = 27

Lower Specification Limit, LSL = 21

Mean = 22

Standard deviation, \sigma = 0.25

Required:

Find the process capability index

First center the mean by taking the average of the LSL and USL.

X = \frac{21 + 27}{2}

\frac{48}{2} = 24

X = 24

Use formula below to find process capability index:

C_p_i = min [(\frac{USL - X}{3*\sigma}), (\frac{X - LSL}{3*\sigma})]

C_p_i = min [(\frac{27 - 24}{3*0.25}), (\frac{24 - 21}{3*0.25})]

= min [(\frac{3}{0.75}), (\frac{3}{0.75})]

min [ (4.00), (4.00)]

We are sullosed to take the minimum value, but since both values are equal, our process capability index will be 4.00

Therefore, the process capability index = 4.00

7 0
3 years ago
Compare and contrast the protection to intellectual property provided by trade secrets relative to that provided by patents. Wha
Vera_Pavlovna [14]

Answer:

1. Protection to trade secrets and patents:

a. Trade secrets are protected indefinitely.  Generally, patents are granted for a maximum of 20 years.

b. The owner of a trade secret does not need to pay annual fee to defend the secret.  A patent holder is required to pay an annual fee, in order to make the patent enforceable.

2. Important defense for defendants in trade secret cases that is not available to patent infringement defendants:

The defendant in a trade secret case will cite that the secret is still commercially valuable.  But a patent holder cannot cite this because the patent is granted for a maximum of 20 years to stop stifling innovation.

Explanation:

Both trade secrets and patents are intellectual property rights which confer on their owners the exclusive use of their intellectual property.  The major differences are in the duration and the defense of the rights.  Patents, unlike trade secrets, do not last forever.  Patents, again unlike trade secrets, must be defended periodically through the payment of fees.

7 0
2 years ago
quipment purchased in 2006 for ​$30 comma 000 must be replaced in late 2017. What is the estimated cost of the replacement equip
DiKsa [7]

Answer:

$53,355.7047

Explanation:

The computation of the estimated cost of the replacement cost is shown below:

Estimated cost = (old cost i.e purchased cost of an equipment ÷ Cost index of that year i.e 2006) × estimated cost index  for 2017

= ($30,000 ÷ 149) × 265

= $53,355.7047

We simply applied the above formula so that the estimated cost could come

6 0
3 years ago
1. Which task is performed by a book - Keeper
zmey [24]

Answer:

B.

Explanation:

A book-keeper is an employee hired for keeping a day-to-day record of financial transactions in ledger. The book-keeper performs the task of book-keeping of financial transactions of a company or enterprise.

The financial transaction includes sales, purchases, payments, etc. These enteries are recorded in a general ledger. This entering of financial transactions has to be done on daily basis.

Thus the correct answerr is option B.

6 0
3 years ago
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