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adell [148]
3 years ago
7

You wish to buy a Euro Call Option expiring in 6 months with a strike price of $1.35. The volatility of the $/Euro exchange rate

is expected to be 8.36% on an annualized basis. Currently the interest rate on the euro is currently 0.00% whereas it is 1.5% on the dollar. What is the price of this call option? What is corresponding Put Option worth? What happens to the price of both the Call and Put Option when the volatility goes to 10%. What are the new prices? What happens to the price of both the Call and Put Option as we get closer to the expiration date? What is the new price of the call if no other factors change but we are 3-months away from expiration?
Business
1 answer:
Dimas [21]3 years ago
3 0

Answer and Explanation:

Assuming Spot rate for EURUSD is $1.2328, the price of Call option is $0.0026 and and the corresponding Put option is $0.1099.

When Call option near maturity, price starts decreasing and nears 0 just before maturity, since it is about to mature and the time value goes on decreasing - price of the option is based upon majorly the intrinsic value. Price of Put option increases as and how it nears maturity.

At maturity = 3 months, price of Call option is $0.0003 and Put option is $0.1126.

Considering all other parameters being same, if volatility increases to 10.0%, price of Call option is calculated at $0.0052 and that of a Put option is $0.1124.

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7 0
3 years ago
Endor Company begins the year with $110,000 of goods in inventory. At year-end, the amount in inventory has increased to $118,00
Arada [10]

Answer:

11.40

32 days

Explanation:

Inventory turnover and days of sales of inventory are examples of activity ratios.

They are used to measure the efficiency of performing daily tasks

inventory turnover =  Cost of goods sold/ average inventory

Average inventory = ($118,000 + $110,000) / 2 = $114,000

Inventory turnover =  $1,300,000 / $114,000 = 11.40

days of sales of inventory = 365 / inventory turnover = 365 / 11.40 = 32 days

5 0
3 years ago
Green Valley Exporters USA has $100,000 of before tax foreign income. The host country has a corporate income tax rate of 25% an
Vinil7 [7]

Answer:

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7 0
3 years ago
Grocers in neighborhoods with a large Hispanic population typically carry more brands that Hispanic consumers prefer than grocer
jolli1 [7]

Answer:

D. local marketing

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Local marketing can be done through sponsorship of events, advertisement, e.t.c.

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3 years ago
F your own idea,why does a business exist.?​
geniusboy [140]

If F my own idea, why do Businesses exist? to get that paperrrrr

Don't take this seriously, this is a joke.

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