You buy a put option to sell stock at $35. The price of the stock is $34 when you bought it, and the price paid for the put is $
2. What is the percentage return from purchasing the put if at the expiration of the put the price of the stock is $31?
1 answer:
Answer:
Answer for below mentioned question "
You buy a put option to sell stock at $35. The price of the stock is $34 when you bought it, and the price paid for the put is $2. What is the percentage return from purchasing the put if at the expiration of the put the price of the stock is $31?"
is explained in the attachment.
Explanation:
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Answer:
a. decrease of $18,000
Explanation:
The calculation of overall effect on the company's monthly net operating income is shown below:-
<u>Particulars Current Proposed </u>
Sales $800,000 $837,000
($200 × 4,000) (200 - 14) × (4,000 + 500)
Variable
expenses $160,000 $180,000
(40 × 4,000) (40 × (4,000 + 500))
Contribution
margin $640,000 $657,000
Fixed
expenses $531,000 $566,000
($531,000 + 350,00)
Net operating
income $109,000 $91,000
Decrease in net operating income is
= $109,000 - $91000
= $18,000
