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Arada [10]
3 years ago
11

The common stock of the P.U.T.T. Corporation has been trading in a narrow price range for the past month, and you are convinced

it is going to break far out of that range in the next 3 months. You do not know whether it will go up or down, however. The current price of the stock is $110 per share, and the price of a 3-month call option at an exercise price of $110 is $6.53. a. If the risk-free interest rate is 8% per year, what must be the price of a 3-month put option on P.U.T.T. stock at an exercise price of $110? (The stock pays no dividends.) (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Business
1 answer:
RoseWind [281]3 years ago
5 0

Answer:

$3.86

Explanation:

According to the scenario, computation of the given data are as follow:-

Current price of stock (S0) = $110

Call option at exercise price X is $110

Three month call option price (C) = $6.53

Risk free interest rate = 8%

Price of the three month P.U.T.T option (P) = C - S0 + PV (X)

= $6.53 - $140 + $140 ÷ (1+8%)^(3÷12 )

= $6.53 - $140 + $140 ÷ (1+8%)^.25

= $6.53 - $140 + $140 ÷ 1.019427

= $6.53 - $140 + $137.33

= $3.86

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Joint ventures: a. are an alternative to new ventures. b. are attractive when entry barriers are high. c. are attractive when sp
Dafna11 [192]

Answer:

Are an alternative to new ventures.

Explanation:

Joint ventures is a business arrangement between two of more organisations to form a partnership. The oganisations involved share ownership, profits, investments.

A joint venture provides access to a large number of resources and it also provides the opportunity to gain new insight and expertise.

Different organizations enter into joint venture for either the purpose of a production process or research avtivity.

3 0
3 years ago
An industry that has many companies offering the same basic product, but with some slight difference is
mario62 [17]

An industry that has many companies offering the same basic product, but with some slight difference is B. monopolistic competition.

Monopolistic competition is found in industries where slight differences of a product is possible but they basically offer the same thing. A few examples of monopolistic competition are those in the restaurant or hospitality career field. These businesses offer food or hotel rooms which are what their competitions offer as well, but what they include within their packages or their food offerings may differ.

6 0
3 years ago
In what circumstances is it ethical for public speakers to use emotional appeals when speaking to persuade? Are there any kinds
Soloha48 [4]

Answer and explanation:

Emotional appeals are ethically valid in persuasive speeches when the speaker wants to emphasize a specific matter that is relevant for the audience to understand. By showing anger, pity or fear the speaker tries to put into the audience's shoes but immediately after that exposes the solution to the possible problem.

However, there might be cases when emotional appeals could be taken too personal which turns the speech subjective. The speaker must avoid getting to that point otherwise the audience will be unlikely to identify themselves with what the speaker is trying to expose.

6 0
3 years ago
At the beginning of 2018, Midway Hardware has an inventory of $310,000. Because sales growth was strong during 2018, the owner w
nalin [4]

Answer:

$1,625,000

Explanation:

For computing the purchase amount first we have to determine the cost of goods sold which is shown below;

As we know that

Cost of goods sold = Sales revenue - gross profit

                               = $2,100,000 - $2,100,000 × 25%

                               = $2,100,000 - $525,000

                               = $1,575,000

Now the purchase amount is

Cost of goods sold = Beginning inventory + purchase - ending inventory

$1,575,000 = $310,000 + purchase - $360,000

So, the purchase amount is $1,625,000

4 0
2 years ago
TEFCO, a computer processor manufacturing company, recently adopted a new fabrication process to manufacture microprocessors. Th
enyata [817]

Answer:

first-mover advantage

Explanation:

First-mover advantage exists when making the initial move into a market allows a firm to establish a dominant position that other firms may struggle to overcome.

4 0
3 years ago
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