Answer:
B. The price of the call option will increase by less than $2, but the percentage increase in price will be more than 10%.
Explanation:
Given
Trading price = $20
Exercise price of call option = $20
Call option price = $1.50
Price increment = 10% to $22
It's not be noted that the discounted present value of a price of an option is represented by its expected payoff.
An increment of $2 in stock price attracts an increment of more than $2 in the payoff option.
Having highlighted that, it's also to be noted that the increment in expected payoff will be by an amount less than $2 and same with present value because the possibility is less than 1. So, the price of the option will increase by less than $2.
Moving to the percentage increase;
This will be larger than 10%.
This is because when stock price increases by 10%, the value of the option will increase by more than 10%.
Answer:
The correct answer is: market prices that are determined by consumers and producers acting in their own self-interest.
Explanation:
In a market system, the price of a good is determined by the intersection of demand for goods by consumers and the supply of goods by the producers. The price is determined at the point where the market forces of demand and supply are equal.
The producer is trying to maximize its profit while the consumer is trying to maximize its utility. Both are working for their self-interest and in this way are able to allocate scarce resources through the working of the market system.
Answer:
The correct answer is option c.
Explanation:
A rational consumer will always try to maximize his utility given his limited income.
The consumer optimum will be that bundle of goods and services which provide maximum total utility to a consumer, given his fixed income.
The total utility will be maximized when the marginal utility of money spent on each good is equal.
Answer:
The 38,800 mattresses need to be produced in the first quarter (January, February, March) of 2013
Explanation:
The computation of the mattresses need to be produced in the first quarter is shown below:
= Total sales in first quarter + ending finished goods inventory - beginning finished goods inventory
where,
Total sales in the first quarter = January Sales + February sales + March sales
= 10,000 + 14,000 + 13,000
= 37,000 units
Ending finished goods inventory = April sales × percentage given
= 16,000 × 30%
= 4,800 units
And, the Beginning Finished goods inventory is 3,000 units
Now put these values to the above formula
So, the value would be equal to
= 37,000 + 4,800 - 3,000
= 38,800 units
The retail executive who oversees a group of buyers and is responsible for the trading activities of the relevant sales department or division group is the General Merchandise Manager (GMM).
Retail is a commercial activity that involves selling goods or offering services directly to final consumers. Goods purchased from retail businesses will be used by consumers for personal consumption or for family and household purposes, not for resale.
Also known as retail business, retail acts as a marketing intermediary that connects major producers or large wholesalers with consumers who buy in small quantities or in units. After purchasing a number of goods from a larger group of businesses, the retailer or retailer will resell the goods by setting a certain additional price to make a profit.
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