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Brrunno [24]
3 years ago
10

The prices of a certain security followa geometric Brownian motion with parameters μ = .12 and σ = .24. If the security’s price

is presently 40, what is the probability that a call option, having four months until its expiration time and with a strike price of K = 42, will be exercised? (A security whose price at the time of expiration of a call option is above the strike price is said to finish in the money.)
Business
1 answer:
Mazyrski [523]3 years ago
7 0

Answer:

Probability = 45%

Explanation:

The stock is above 42 after 4 months. Well the distribution of the stock after 4 months (1/3 of a year) satisfies.

ln(S/40) = a normal distribution with mean μt - 0.5σ^{2t} and

std dev σsqrt(t) => a normal distribution with mean 0.03 and std dev 0.1385

ln(S/40) => ln( 42 / 40 ) => 0.049.

Convert to standard normal => (0.049-0.03)/0.1385 => 0.133

The answer is the area of the normal distribution above 0.133 which is about 45%

Hope this helps!

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Tony’s Market recorded the following events involving a recent purchase of inventory: Received goods for $80,000, terms 2/10, n/
kap26 [50]

Answer:

Correct option is D

Answer is increased by $ 77232

Explanation:

Effect on Inventory:    

Increase due to purchase $80000  

Decrease due to return   -$1600  

Increase for freight paid  $400  

Decrease for discouont availed -$1568 (78400*2%)

<u>Net Increase in Inventor =$77,232</u>

4 0
3 years ago
Which type of diversity might be an issue in the situation described in the case
Sonbull [250]

The type of diversity issue that the case described was <u>E. age</u>.

<h3>What is age discrimination?</h3>

Age discrimination is a diversity issue that involves an employer treating its employees with less favor because of their age.

<h3>Answer Options:</h3>

a. r...

b. opinions and values

c. s.... orientation

d. g.....

e. age

Thus, in the lawsuit that Guido and Rankin brought against the Mount Lemmon fire district, the diversity issue was an age issue.

See the attachment for the complete question and answer options.

Learn more about workplace age discrimination here: brainly.com/question/7239617

Download docx
8 0
2 years ago
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Dmitry_Shevchenko [17]
Heyyyyyy thanks for the points, have a nice day/night wtv :)
6 0
3 years ago
Read 2 more answers
The bretton woods agreement incorporated all of these features except ________.
telo118 [61]
Hello <span>Wahsorad4380 </span>



Question: The bretton woods agreement incorporated all of these features except ________.<span>

Answer: floating exchange rates


Hope This Helps!
<u>-Chris</u></span>
8 0
3 years ago
Multiple Choice Question 121 The following information pertains to Ortiz Company. Assume that all balance sheet amounts represen
olasank [31]

Answer:

Inventory TO 5.5

This means Ortiz sales his inventory 5.5 times per year.

Explanation:

Inventory turnover for Ortiz

\frac{COGS}{Average Inventory} = $Inventory Turnover

​where:

$$Average Inventory=(Beginning Inventory + Ending Inventory)/2

COGS:     66,000

In this case the average inventory is provided already: 12,000

\frac{66000}{12000} = $Inventory Turnover

Inventory TO 5.5

This means Ortiz sales his inventory 5.5 times per year.

5 0
3 years ago
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