Answer:
The answer is "$400"
Explanation:
The price value of the exercise:
= $127
The expiration date price value is:
= $135
Calculating the profit for Calls buyer:
= $135-$127
= $8
The value of 1 call = 100 shares
calculating the total profit :
=$ 8 × 100
= $ 800
One alternative purchase price:
= $12
Call option Total purchase price:
= $12 × 100
= $1200
The buyer's total loss:
= $1200 - $800
= $400
The Loss for the buyer: 
Hence profit for the writer = $400
IPhone. People pay a ton for iPhones. I think people pay so much because it’s a computer in ur pocket.
Answer:
Payoff = $2 per share.
Explanation:
In a put option, the long (the party that buy the put) will have gain on the option when the underlying asset price is lower than the excercise price of that asset <em>(imagine the advantage that you can sell a chicken at $12 when it market price of is is only 10)</em>.
Because the stock price is $91, lower than exercise price of 93, so the company should exercise the put. Total payoff per share is 93 - 91 = $2.
<em>Note: We dont include premium to buy the put here because the question asking about payoff. We on include premium in calculations when the question is about profit.</em>
Answer and Explanation:
The computation of the margin of safety is shown below:
As we know that
margin of safety = Actual sales - break even sales
For Jakarta, it is
= $500,000 - ($80,000 ÷ 0.40)
= $500,000 - $200,000
= $300,000
And, for maldives, it is
= $6,620,000 - ($2,151,500 ÷ 50%)
= $2,317,000
Answer:
16.80% and 39.43%
Explanation:
The formula to compute the net profit margin is shown below:
Net profit margin = Net income ÷ Total revenues × 100
For Travel lite, the net profit margin is
= $1,080 ÷ $6,430 × 100
= 16.80%
And, for fare line, the net profit margin is
= $3,020 ÷ $7,660 × 100
= 39.43%
By dividing the net income or net profit by the total revenues we can get the net profit margin or we can say it is profit percentage that is earned by the company
It is always expressed in percentage
