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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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Multiple Choice Question 104 Oriole Company's accounting records reflect the following inventories: Dec. 31, 2020 Dec. 31, 2019
irina1246 [14]

Answer:

COGS= $2,129,700

Explanation:

Giving the following information:

Finished goods inventory:

Beginning= $190,000

Ending= $150,000

Cost of goods manufactured= $2,089,700

The cost of goods sold is calculated using the following formula:

COGS= beginning finished inventory + cost of goods manufactured - ending finished inventory

COGS= 190,000 + 2,089,700 - 150,000

COGS= $2,129,700

3 0
4 years ago
Harold receives a life annuity from his qualified pension that pays him $5,000 remainder of his cost of the annuity. Which of th
arlik [135]

Answer:

The correct option for Harold to do after he has received the cost of the annuity is to include the entire amount of each annuity payment in gross income

Explanation:

As the cost of the annuity has been received by  Harold and whatever he is receiving afterwards is the income. Thus he will include the complete value in the gross income and the taxes will be calculated accordingly.

4 0
3 years ago
Daniel, age 38, is single and has the following income and expenses in 2016.
JulsSmile [24]

Answer: See Explanation

Explanation:

A. Calculate Daniels AGI

To calculate Daniel's AGI, we have to get his gross income first which will be:

=

Salary income + Net rent + Dividend income

= $60,000 + $6000 + $3500

= $69500

His deductions FOR AGI will be calculated as:

Alimony paid = $12,000

Contribution to traditional IRA = $5,000

Loss on sale of real estate = $2,000 Deduction for AGI = ($19,000)

Adjusted gross income will now be:

= $69500 - $19000

= $50,500

b. Should Daniel itemize his deductions from AGI or take the standard deduction? Explain.

The itemized deductions include:

Mortgage interest on residence = $4,900

Add: Property tax on the residence = $1,200

Add: Contribution to United church = $2,100

Add: State income tax = $300

Total itemized deductions = $ 8,500

Since the total itemized deductions is $8,500 and the deduction for AGI is $19000, he should therefore itemize his deductions as it is cheaper.

8 0
3 years ago
1. Which of the following is true about 401(k) plans? Select all that apply. (Select 2)
Tomtit [17]

<u>1. The correct choices are;</u>

<u>b. money is set aside for retirement before tax reductions</u>

<u>d. some employers match employee contributions</u>


A 401(k) is a retirement savings plan supported by a business. It gives specialists a chance to spare and contribute a bit of their paycheck before duties are taken out. Charges aren't paid until the point that the cash is pulled back from the record.  

With a 401(k), you control how your cash is contributed. Most designs offer a spread of common finances made out of stocks, securities, and currency advertise speculations. The most mainstream choice will in general be deadline reserves, a mix of stocks and bonds that bit by bit turn out to be progressively preservationist as you achieve retirement.


<u>2. The answer is "b. flex time".</u>


Workers don't have one-measure fits-all timetables. Numerous parts of their own lives can strife with the standard 9-to-5, Monday through Friday hours. Whatever the reason, most representatives value having the capacity to pursue a flexible schedule, also known as flextime.

Flextime enables representatives to modify their calendars inside a specific scope of hours and days.Flextime is feasible for any activity work, yet it's substantially more hard to offer it to client and customer centered workers.


<u>3. The answer is "b. overtime".</u>


Non-exempt employee alludes to a classification of workers qualified for extra time pay and the lowest pay permitted by law as depicted in the Fair Labor Standards Act (FLSA). Non-exempt representatives must be paid for every hour that they work and 1.5x their time-based compensation for any hours worked more than 40. Workers who win under $455/week and the individuals who don't utilize individual attentiveness and autonomous judgment at any rate half of the time are considered non-absolved. Hands on, development, semi-talented and support specialists are non-excluded.  


<u>4. The answer is "a. It is a person's income before taxes and deductions".</u>

Gross income, also called gross pay, is a person's aggregate make good on before government expenses or different deductions. This incorporates salary from all sources and isn't constrained to pay got in real money, yet can incorporate property or administrations got.  

For a few people, gross income is just their pay before charges and conclusions. The dollar sum people get from their paycheck after all the assessment and different conclusions are made is the salary, likewise called net pay. However, for different people, there are different kinds of pay that ought to be incorporated while figuring gross pay.


<u>5. The answer is "d. Work atmosphere".</u>

An unfriendly or useless work environment isn't only troublesome for representatives, it additionally harms the organization's picture, impedes worker execution and consumes the organization's benefits.  

Your work atmosphere impacts your inclination, drive and execution. On the off chance that representatives work in a bleak office setting with disagreeable specialists, they likely won't feel spurred or certain to talk up. That is the reason making a beneficial work atmosphere is basic to the general accomplishment of your organization.

7 0
3 years ago
Read 2 more answers
Suppose that in 1984 the total output in a single-good economy was 7,000 buckets of chicken. Also suppose that in 1984 each buck
Oduvanchick [21]

Answer: The answer is as follows:

Explanation:

Given that,

Output in 1984 = 7,000 buckets of chicken

Price in 1984 = $10

Output in 2005 = 22,000

Price in 2005 = $16

(1) GDP price index for 1984, using 2005 as the base year:

= \frac{Price\ of\ good\ in\ specific\ year}{Price\ of\ good\ in\ base\ year}\times100

=  \frac{10}{16}\times100

= 62.5

(2) Price level, as measured by this index, rise between 1984 and 2005:

Percentage change in the price level = \frac{New\ price\ level - original\ price\ level}{Price\ in\ base\ year}\times100

                                                              = \frac{100 - 62.5}{62.5}\times100

                                                              = 60%

(3) Real GDP for t year = Base price × Quantity in t year

Real GDP in 1984 = Quantity in 1984 × Price in 2005

                              = 7,000 × 16

                              = $ 112,000

Real GDP in 2005 = Quantity in 2005 × Price in 2005

                              = 22,000 × 16

                              = $ 352,000

3 0
3 years ago
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