Answer:
To create the collar, the customer would: <u>buy 1 PHLX 59 SF Call and sell 1 PHLX 61 SF Call.</u>
Explanation:
The meaning of a "collar" is that a put is bought at a strike price that is less than the price of the underlying instrument (this implies that a floor has been put on the price of the instrument); and that a call is disposed at a strike price which is higher than the price of the underlying instrument (this indicates that a ceiling above which the instrument will be called away has been created).
When a collar is put on the price, it indicates that the customer is majorly giving a guarantee for the underlying instrument's minimum and maximum price.
This should make the net cost of the collar to be close to zero due to the fact that the two contracts are "out the money" and also because the premium paid to buy the put is offset by the premium received when the call was sold.
Therefore, since customer in the question wishes to place a collar on the position using PHLX SF FLEX options, he would <u>buy 1 PHLX 59 SF Call and sell 1 PHLX 61 SF Call</u> to create the collar.
Answer:
Explanation:
In order to find the highest amount david can pay or in other words the present value of the investment we would have to discount the cash flows
3000/1.08+3000/1.08^2+3000/1.08^3+3000/1.08^4+3000/1.08^5=11,978
The initial net working capital requirement for this project exists $69,000.
<h3>What is meant by net working capital?</h3>
The difference between a company's current assets such as cash, accounts receivable/unpaid invoices from customers, and inventories of raw materials and completed goods and its current liabilities such as debts and accounts payable is known as working capital, sometimes known as net working capital (NWC).
The difference between a company's current assets and current liabilities is known as net working capital. A company's balance sheet is used to calculate net working capital. The more net working capital you have, the more probable it is that your business will be able to pay its present commitments.
net working capital requirement = $61,000 − 28,000 + 36,000
net working capital requirement = $69,000
The initial net working capital requirement for this project exists $69,000.
To learn more about net working capital refer to:
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35 its just 5 x 7 you multiply the number of eggs by how many minutes.
Answer: Systems selling
Explanation:
The system selling is one of the type of business strategy that helps in understanding the selling process by sell he various types of products an the services in the market in the interrelated manner rather than independently.
According to the given question, the system selling is the concept in which the business deliver the goods by using the interlocking and also consolidating the products from the supplier.
Therefore, System selling is the correct answer.
