According to the diagram, some of the physical flow travels from firms to the government. Which of the following would be part o
f that flow?
A. computers for government offices
B. Medicare taxes paid by businesses
C. import taxes paid by foreign businesses
D. Social Security checks paid each month
A. computers for government offices
B. Medicare taxes paid by businesses
C. import taxes paid by foreign businesses
D. Social Security checks paid each month
2 answers:
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Answer:
correct option is $38.21
Explanation:
given data
stock price = $100
stock price = either $160 or $60
interest rate = 6%
exercise price = $135
solution
we get here Hedge ratio that is express as
Hedge ratio = (Pay off in case price appreciates - Pay off in case price depreciates) ÷ (Appreciated price - Depreciated price) ..................1
put here value we get
Hedge ratio = ( Max [$135 - $160, $0] - Max[$135 - $60, $0]) ÷ ($160 - $60)
Hedge ratio =
Hedge ratio = - 0.75
so here Price of Put option is
Price of Put option = -Hedge ratio × {Appreciated price ÷ (1 + risk free rate) - Present stock price}
Price of Put option = -(-0.75) ×
Price of Put option = $38.21
so here correct option is $38.21