Answer:
Call payoff = Max [0, Stock price - Strike price]
Call payoff = Max[0,25-20]
Call payoff = 5
Put payoff = Max[0, strike price - stock price]
Put payoff = max[0,20-25]
Put payoff = 0
Strike price = K = 20
Stock price = S = 25
interest rate = 10% = 0.1
Time to expiry = T = 3 months = 3/12 = 0.25
Put call parity: C + K*Exp(-r*T) = P + S
C = P + S - K*Exp(-r*T)
Call = 3 + 25 - 20*exp(-0.1*0.25)
Call = 28 - 19.5062 =
Call = 8.4938 > 3
So, yes there is an arbitrage
. Implied value is 8.4938 but trades at 3.00; Call option is trading cheap hence we should buy more call options.
Unexpectedly high inflation tends to hurt lenders the most. When lenders lend money, it is valuable , but the amount of money that must be returned to him/her is fixed. Over time, the value of the money keeps depreciating and finally when the borrower does return the money, the value decreases to a very small amount, which is not worth much. For example, let's say a borrower borrows money from a lender to buy a car. With time, the value of money depreciated so much that when the borrower finally returns the money, the same amount of money is not even worth buying a box a matches!
It was theorised by some conflict theorists that the education had made the students socialise into values dictated by the powerful. Furthermore, these conflict theorists believe that there would always be groups that would impose dominance to the less powerful in the society.
Answer:
B. They have a history of not making their payments on time.
Explanation:
Answer:
A general rule of thumb among marketing researchers is to use secondary data first and then collect primary data.
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