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Alenkinab [10]
3 years ago
13

34. Consider a binary (digital) option on a stock currently trading at $100. The option pays a $1 if the stock price goes below

$100 three months from now. The annualized standard deviation of the stock is 20%, and the risk-free rate is 0%. Suppose you sold a 100 of these binary options. How many shares of the underlying stock you need to long/short to achieve a delta-neutral position
Business
1 answer:
Vladimir [108]3 years ago
3 0

Answer:

48

Explanation:

N(d2): probability of call option being exercised

So current stock price = 100

K strike price = 100

r risk free rate = 0% = 0.05

s: standard deviation = 20%

t: time to maturity = 3month = 0.25 year

di – In(So/K) + (r +0.5 * 5%) ** S*t0.5

d1 = 0.05

d2 = dl - 5*10.5

d2 = -0.05

N(d2) = normsdist(d2) = 0.48

Pay-off per option = 1

No. of options sold = 100

Expected pay-off = -0.48*1*100 = -48

Therefore go long on 48 shares so that if stock price becomes 101, pay-off from stocks = 48*(101-100) = 48

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So you can then subtract 0.53 from 5.30 to get the answer of:

$4.77
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Answer:

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After the manufacturing of the goods, the process of distribution proceeds. In this process, the goods and services produced are distributed from the producers to the consumers. Transportation, packaging, storage, and advertising are some of the processes that lie between the production and distribution of the products.

According to the given options, the basic question to be asked related to the distribution of the produced goods is option A. All the other three questions belongs to the production stage.

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2 years ago
select the correct answer. weight management is one benefit of participating in sports. which sentence is true regarding weight
aksik [14]

Regular participation in sports helps preserve muscle mass.

What is Weight Management ?

Weight management is the process of making long-term lifestyle changes to maintain a healthy body weight based on a person's age, gender, and height. Weight management techniques include maintaining a balanced diet and improving physical activity levels.

The overarching goals of weight loss and management are:

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  • Specific targets can be set for each of these objectives.

Meal planning allows you to make healthier choices that are not driven by physical hunger. Plan home-cooked meals, with restaurant dining reserved for exceptional occasions. Packing low-calorie snacks such as fresh fruits, veggies, and whole grains will help regulate hunger throughout the day.

To know more about Weight Management

brainly.com/question/406615

#SPJ4

Complete Question :-

Weight management is one benefit of participating in sports. Which sentence is true regarding weight management?

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5 0
1 year ago
Rick Co. had 30 million shares of $1 par common stock outstanding at January 1, 2021. In October 2021, Rick Co.'s Board of Direc
Bond [772]

Answer:

Debit retained earnings for $15.30 million.

Explanation:

As per the data given in the question,

Declaration of common stock dividend indicates no cash payments, only extra shares issued with rate of stock dividend

In this Rick Co. had 30 million shares and Rick Co. declared 1% stock dividend  

which means 30 million × 1% = 0.30 million shares issued

Retained earning = (0.30 million × $51)  

= $15.30 million

To common stock A/c =  (0.30 × $1) = $0.30 million

To capital paid in access A/c = (0.30 million × ($51-$1)) =  $15.00 million

( Being stock dividend was issued at 1% )

Hence, Option (d) Debit retained earning for $15.30 million is correct.

8 0
2 years ago
The CPA Practice Advisor reports that the mean preparation fee for 2017 federal income tax returns was $273. Use this price as t
larisa [96]

Answer:

The CPA Practice Advisor

The probability that the mean price for a sample of 30 federal income tax returns is within $16 of the population mean is:

= 56%

Explanation:

a) Data and Calculations:

Population mean (preparation fee for 2017 federal income tax returns) = $273

Population standard deviation of preparation fees = $100

Mean price for a sample of 30 federal income tax returns = $257 (which is within $16 of the population mean)

z = (x-μ)/σ

z = standard score

x = observed value

μ = mean of the sample

σ = standard deviation of the sample

Z = ($273 - $257)/$100

= 0.16

Using the z-table

P = 0.5636

6 0
2 years ago
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