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GarryVolchara [31]
3 years ago
15

The common stock of the Avalon Corporation has been trading in a narrow range around $40 per share for months, and you believe i

t is going to stay in that range for the next three months. The price of a three-month put option with an exercise price of $40 is $3, and a call with the same expiration date and exercise price sells for $4. Selling a straddle would generate total premium income of _____. $300 $400 $500 $700
Business
2 answers:
solniwko [45]3 years ago
5 0

Answer:

$700

Explanation:

Selling a straddle means that you are going to both sell a call option and a put option. Since you expect that the price of Avalon's stock remains around $40, then if you sell either a call or put option, at $40, you will not lose money if the other trader decides to execute their option.

Each call option is priced as $3 per share = $3 x 100 shares = $300

<u>Each put option is priced as $4 per share = $4 x 100 shares = $400  </u>

                                                                                    total gain = $700

So if everything goes as planned, you should be able to earn $700. If the price of the shares changes, then you earnings will be a little lower.

Sergeu [11.5K]3 years ago
4 0

Answer:

$700

Explanation:

Given that

Price of a 3 month put option = $3

Price of a 3 month call option = $4

Considering the above

Selling the straddle = sell a put + sell a call

Thus,

Total premium income from selling a stradle = (P + C)100

Where,

P is price of put

C is price of call

Therefore,

Total premium from selling a stradle

= (3 + 4)100

= 7 × 100

= $700

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Answer:

The Balanced Scorecard for Management Control

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According to a well-known adage, "what you measure is what you get."  The BSC approach strategically and holistically measures an organization's performance by identifying all the factors that cause improved organizational outcomes.   Therefore, the benefits of using a balanced scorecard include improved internal capacity created by a focus on improving an organization's learning and growth through the Learning and Growth perspective.  This cascades to improved internal processes which result from the internal perspective.  With improved processes, customers and other stakeholders derive better and maximum satisfaction from the organization.  This does not end here.  Satisfied customers cause improved financial results, which are distributed to an organization's stakeholders, including the government in form of taxation, dividends for stockholders, and better pay for employees, etc. These stakeholders in turn try to add value to the organization with better processes and operations, improved financing, and business opportunities.

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The Balanced Scorecard (BSC) utilizes a 360 degree approach to achieve effective control of resources toward attaining goals by viewing organizational performance from four broad perspectives, which cover all aspects of any organization.  The four perspectives that BSC uses are the  Financial Perspective, the Customer Perspective, the Internal Business- Process Perspective, and  the Learning and Growth Perspective.  By approaching performance evaluation and management with these perspectives, the Balanced Scorecard is able to achieve all-round management control because no aspect of the organization is left behind.

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Supply chain managers outsource logistics to meet three​ goals: A. drive down inventory​ investment, lower delivery​ costs, and
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A. drive down inventory​ investment, lower delivery​ costs, and improve delivery reliability and speed.

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Specialized logistics companies deliver raw material and distribute finished goods at a fast speed and lower cost. Outsourcing will present the supplies manager as reliable in the books of their customers.

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