What number should be placed in the box to help complete the division calculation? Long division setup showing an incomplete cal
culation. 12 is in the divisor, 6839 is in the dividend, and 5 hundreds and 6 tens is written in the quotient. 6000 is subtracted from 6839 to give 839. An unknown value represented by a box is being subtracted from 839. Numerical Answers Expected! Answer for Blank 1: Look at the pic
1 answer:
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Answer:
Step-by-step explanation:
An option to buy a stock is priced at $150. If the stock closes above 30 next Thursday, the option will be worth $1000. If it closes below 20, the option will be worth nothing, and if it closes between 20 and 30, the option will be worth $200. A trader thinks there is a 50% chance that the stock will close in the 20-30 range, a 20% chance that it will close above 30, and a 30% chance that it will fall below 20.
a) Let X represent the price of the option
<h3><u> x P(X=x) </u></h3>
$1000 20/100 = 0.2
$200 50/100 = 0.5
$0 30/100 = 0.3
b) Expected option price
Therefore expected gain = $300 - $150 = $150
c) The trader should buy the stock. Since there is an positive expected gain($150) in trading that stock option.