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3 years ago

Both a call and a put currently are traded on stock XYZ; both have strike prices of $45 and expirations of 6 months.

Business

1 answer:

pychu [463]3 years ago

6 0

Answer:

a. Profit to an investor who buys call for $4

a. $ -4

b. $ -4

c. $ -4

d. $ 1

e. $ 6

b. Profit to an investor who buys call for $6.5

a. $1.5

b. $6.5

c. $ -1.5

d. $ -3.5

e. $ -8.5

Explanation:

The call option is a derivative in which an investor buys an option to buy the asset at a certain price. The value of the call option is determined by maturity. The buyer of call option can buy an asset at a strike price before expiration date.

If the investor buys the call option for $4 then the $4 is an expense for the investor. The value of call will be -4 unless the stock price is above $50.

If the investor buys the call option for $6.5 then the $6.5 is an expense for the investor. The value of call will be -6.5 unless the stock price is below $50.

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taurus [48]

Answer:

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Explanation:

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4 years ago

Huck Finn is thinking about purchasing some stock in Mississippi Mining Company (MMC). Huck uses the price/earnings ratio techni

musickatia [10]

Answer:

Profit earning ratio of MMC = 10%

Explanation:

Given:

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Profit earning ratio (P\E ratio) =?

Computation of profit earning ratio:

Profit earning ratio (P\E ratio) = Current stock price / Yearly profit on each share

Profit earning ratio (P\E ratio) = $100 / $10

Profit earning ratio (P\E ratio) = 10

It is computed that MMC's Profit earning ratio is nearer to the industry averages P/E ratio so, the investor can wait for some time to purchase this stock.

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3 years ago

Ma Barker Company has a job-order costing system and uses a predetermined overhead rate based on direct labor-hours to apply man

Sophie [7]

Answer:

Job 334 total cost: $ 8,400

Unit cost: 8,400 / 200 = $ 42

Explanation:

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Labor: 2,400

Overhead:

$\frac{Cost\: Of \:Manufacturing \:Overhead}{Cost \:Driver}= Overhead \:Rate$

We distribute the expected cost over the expected base:

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cost per hour: 100,000 / 40,000 = 2.5 predetermined overhead

Now we multiply this rate by the hours of the job to know Applied Overhead:

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3 years ago

Craigmont company's direct materials costs are $3,000,000, its direct labor costs total $7,000,000, and its factory overhead cos

Ivanshal [37]

Conversion cost is defined as the sum of direct labor costs and manufacturing overhead costs. It is the manufacturing cost needed to convert raw materials to a product. From the information given above, the conversion cost is the summation of direct material costs, direct labor costs and factory overhead costs.
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3 years ago

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PtichkaEL [24]

Answer:

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3 years ago