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Bess [88]
3 years ago
9

The current stock price of Alcoco is $70, and the stock does not pay dividends. The instantaneous risk-free rate of return is 6%

. The instantaneous standard deviation of Alcoco's stock is 40%. You want to purchase a call option on this stock with an exercise price of $75 and an expiration date 30 days from now. Based on the Black-Scholes OPM, the call option's delta will be __________.
Business
1 answer:
Mashutka [201]3 years ago
3 0

Answer:

0.31

Explanation:

current stock price $70

risk free rate = 6%

standard deviation = 40$

30 day call option $75

the simplest way to calculate delta (or stock position) is to use a scientific calculator, but if you want you can also do it manually:

delta = N(d₁) ⇒ cumulative normal distribution probability at d₁

with d₁ = [ln (S/K) + (r2  + σ ²/2)T] / σ√T

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Margaret [11]

Answer:

C) The company followed a low inventory system.

Explanation:

As the product was new, the correct estimate of expected sales could not be made, and with high demand and hype in the market the company, there was a high demand of the product.

This certainly led to stock out, and not meeting the customers needs.

Accordingly the reputation in market degraded.

This is because of low performance, because of shortage of inventory.

Therefore, the correct option is:

Poor Inventory system, which led to poor performance.

6 0
3 years ago
Which of the following is an example of economic investment?
otez555 [7]

Answer:

Nike buys a new machine that increases shoe production.

Explanation:

An economic investment is when you pay for new additions to the capital stock or new replacements for capital stock that has worn out.

It refers to the net additions to the capital stock of the society which consists of goods and services that are used in the production of other goods and services.

Addition to capital stock means an increase in buildings, plants equipments and inventories over the amount of goods and services that existed.

3 0
3 years ago
Campaigns focus on their __________ efforts in the last days before the general election.
Sophie [7]
The goal of the  political campaigns is to influence the decision making process. I<span>deas that the candidate wants to share with the voters are presented.
</span>Campaigns start anywhere from several months to several years before election day. The first part of any campaign for a candidate is deciding to run. Then c<span>andidates travel around the area they are running in and meet with voters.</span><span>
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3 0
3 years ago
"a company is developing an expert system. it has assembled the participants in its expert systems. taylor has extensive knowled
DIA [1.3K]
Mary's role is that of a knowledge engineer.
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6 0
3 years ago
Company's Z's earnings and dividends per share are expected to grow indefinitely by 4% a year. Assume next year's dividend per s
Kazeer [188]

Answer:

Explanation:

First, we need to find current stock price, which equals to Next year dividend / (required rate of return - growth rate)

=4 / (0.08 - 0.04)

= $4 / 0.04 = $100

Then we can apply the found current stock price to find present value of growth opportunities

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= $100 - ($4 / 0.08)

=$100 - $50

= $50

6 0
3 years ago
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