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liubo4ka [24]
3 years ago
15

The current price of a stock is $50, the annual risk-free rate is 6%, and a 1-year call option with a strike price of $55 sells

for $7.20. What is the value of a put option, assuming the same strike price and expiration date as for the call option? Select one: a. $7.33 b. $7.71 c. $8.12 d. $8.55 e. $9.00
Business
1 answer:
Vlad [161]3 years ago
6 0

Answer:

The value of the put option is;

e. $9.00

Explanation:

To determine the value of the put option can be expressed as;

C(t)-P(t)=S(t)-K.e^(-rt)

where;

C(t)=value of the call at time t

P(t)=value of the put at time t

S(t)=current price of the stock

K=strike price

r=annual risk free rate

t=duration of call option

In our case;

C(t)=$7.2

P(t)=unknown

S(t)=$50

K=$55

r=6%=6/100=0.06

t=1 year

replacing;

7.2-P=50-55×e^(-0.06×1)

7.2-P=50-(55×0.942)

7.2-P=50-51.797

P=51.797+7.2-50

P=$8.997 rounded off to 2 decimal places=$9.00

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Peer group analysis can be performed byA) management choosing a set of firms that are similar in size or sales, or who compete i
ANTONII [103]

Answer:

D) Only a and b relate to peer group analysis.

Explanation:

Peer group analysis allows investors to see how a certain fund performs over various periods compared to other funds within the same investment strategy. Based on this information both management choosing a set of firms that are similar in size or sales, or who compete in the same market as well as using the average ratios of this peer group, which would then be used as the benchmark, are related to the peer group analysis.

I hope this answered your question. If you have any more questions feel free to ask away at Brainly.

7 0
3 years ago
The operations manager at a printing company has grouped together a work crew to assemble an order of 500 copies of an annual re
Ghella [55]

Answer: Cellular layout

Explanation:

 The cellular layout is one of the organizational process in which the various types of similar produced are manufacturing together that contain some effective features and the characteristics.

The main goal of the cellular layout is that it helps in encompassing the various types of technology for producing the effective products more quickly.  

According to the given question, the operational manager of the printing company where all the worked together for assembling an order of the 500 copies and this is an example of cellular layout.

 Therefore, Cellular layout is the correct answer.  

3 0
3 years ago
The weekly total cost of baking pies at Tasty Tortes is given by TC = 0.01 Q 1.5. Tasty’s marginal cost of producing 10,000 pies
Hoochie [10]

Answer: $1.50

Explanation:

TC = 0.01Q⁰.⁵

You get marginal cost when you differentiate the total cost.

MC = dTC / dQ

= 1.5 * 0.01 * Q¹.⁵ ⁻ ¹

= 0.015 * Q⁰.⁵

When Q is 10,000, the marginal cost is:

= 0.015 * 10,000⁰.⁵

= $1.50

3 0
3 years ago
A project has an assigned beta of 1.24, the risk-free rate is 3.8%, and the market rate of return is 9.2%. what is the project's
lianna [129]
<span>the answer for this question is 10.50%</span>
7 0
3 years ago
Gore Global is considering the two mutually exclusive projects below. The cash flows from the projects are summarized below.
coldgirl [10]

Answer:

D

Explanation:

Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested

IRR can be calculated with a financial calculator  

Flying Car

Cash flow in year 0 = -$200,000

Cash flow in year 1 = 50,000

Cash flow in year 2 = 50,000

Cash flow in year 3 =80,000

Cash flow in year 4 =100,000

IRR = 13%

To find the IRR using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the IRR button and then press the compute button.  

7 0
3 years ago
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