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VLD [36.1K]
3 years ago
15

When modeling the right to develop an oil property as a real option, and in the presence of fixed costs, using oil price volatil

ity in the option-pricing model will
Business
1 answer:
lora16 [44]3 years ago
4 0

Answer:

overestimate because the value of the option depends on the volatility of revenue

Explanation:

The greater the market volatility, the greater the range that would be needed to determine the option premium. This would end up causing an overestimation of the premium value.

Therefore making use of oil price volatility in the option-pricing model will overestimate as value of option is dependent on how volatile the revenue is.

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As mario is filling out his income tax forms, he makes the decision not to report all of his income. he figures that it is okay
Roman55 [17]
Mario is exhibiting the defense mechanism: rationalization. Mario justifies his controversial decision and behavior (his decision not to report all of his income)  in rational or logical manner. This defense mechanism has two steps. The first step is the <span>decision itself with no reason, and the second step is when the <span>rationalization is performed</span></span> .
6 0
3 years ago
Which is an example of acceptable consideration in a contract?
finlep [7]
D. Thoughtfulness
STEP-BY-STEP EXPLANATION
6 0
2 years ago
Some advocates of behavioral finance agree with efficient market advocates that indexing is theoptimal investment strategy for m
denis-greek [22]

Answer:

Advocates of the efficient market is of the belief that information that is made available publicly is usually reflected in security prices and thus adjustments in price to new information will occur swiftly. Hence, under the EMH, there are no guarantees on the prices of the stock market and thus no investment rules that can bring superior returns. In this light, investors would rather not deviate from the market index.

On the other hand, advocates of behavioral finance is of the belief that biases in behavior is capable of causing stock market prices to be inefficient. Hence making the investors to believe that a deviation from the market portfolio would be advantageous although the level of risk may be high.

Explanation:

6 0
2 years ago
​Saturn, Inc. paid the rent for the current month in cash. Which of the following accounts will be used to record the​ transacti
Bess [88]

Answer:

D) Rent Expense

Explanation:

As per the principles of accounting we follow the accrual principal, where the expense for a period when accrued is accounted for, even if not paid a liability is created. Here, there is payment of rent for the current month in cash, there is nothing due, it is actually paid, since it is paid only for the current month there is nothing paid in advance that shall be debited to prepaid rent. Therefore, the provided rent paid for the current month will be considered as expense for the period and charged as rent expense.

Thus, correct option is

D) Rent Expense

8 0
2 years ago
the fact that output gaps will not last indefinitely, but will be closed by rising or falling prices is the economy's:
serg [7]

The economy's self-correcting property is the fact that output gaps won't last indefinitely, but will be closed by rising or falling prices.

The output gap is the difference, expressed as a percentage of gross domestic product, between an economy's actual output and its highest potential output. An output gap can be either favorable or negative for a nation.

A negative output gap indicates that the economy's actual output is below its maximum capacity, whereas a positive output gap indicates that the economy is beating expectations because its actual output is higher than its acknowledged maximum output. The output gap helps paint a picture of how the economy is doing because the gross domestic product is used in its computation.

To learn more about output gaps, visit the link below:

brainly.com/question/29433322

#SPJ4

3 0
1 year ago
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