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Free_Kalibri [48]
3 years ago
8

You bought an American put option some time ago. Today it has one year left to expiration. Interest rate is 10% per year. Annual

compounding applies. Strike price is $100, and stock price is $5. Which of the following is incorrect?
A. If you wait until expiration day to exercise the put option, the maximum amount it can possibly be worth at that time is 100
B. It is better to exercise the put now than wait until expiration
C. You need to know the option premium to decide whether to exercise it now or to wait
D. If you exercise the option now, it is worth 95
Business
1 answer:
zlopas [31]3 years ago
7 0

Answer:

D. If you exercise the option now, it is worth $95

Explanation:

A put option gives the holder of the option the right to sell a certain stock at an specific strike price.

In order to determine the value of a put option, you must subtract the current market value from the strike value = strike value - current market value = $100 - $5 = $95

If the strike value is lower than the current market value, then the put option is worthless ($0).

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Journalize the following merchandise transactions, using the net method under a perpetual inventory system.
Olenka [21]

Answer:

Part a

Debit : Accounts Receivable $18,000

Debit : Cost of Sales $10,800

Credit : Sales Revenue $18,000

Credit : Inventory $10,800

Part b

Debit : Cash  $16,200

Debit : Discount allowed $1,800

Credit : Accounts Receivable $18,000

Part c

Debit : Accounts Receivable $600

Credit : Cash $600

Explanation:

The perpetual method calculates the cost of sales for each transaction made.

See the journals prepared as above

6 0
3 years ago
Those who are working are defined as_____ (one word) and those who are not working but actively seeking work are defined as____
Nat2105 [25]

Those who're running are described as hired and people who aren't running however actively in search of paintings are described as unemployed.

The required details for Unemployment in given paragraph

Unemployment, in keeping with the OECD now no longer being in paid employment or self-employment however presently to be had for paintings all through the reference period. Unemployment is measured through the unemployment rate, that's the range of those who are unemployed as a percent of the hard work force (the overall range of humans hired introduced to the ones unemployed). Unemployment and the fame of the financial system may be stimulated through a rustic thru, for example, financial policy. Furthermore, the financial authority of a rustic, along with the relevant bank, can have an impact on the supply and price for cash thru its financial policy. In addition to theories of unemployment, some categorizations of unemployment are used for extra precisely modelling the consequences of unemployment within side the financial system. Some of the principle styles of unemployment include structural unemployment, frictional unemployment, cyclical unemployment, involuntary unemployment and classical unemployment.

Structural unemployment specializes in foundational troubles within side the financial system and inefficiencies inherent in hard work markets, which include a mismatch among the deliver and call for of people with important talent sets. Structural arguments emphasize reasons and answers associated to disruptive technologies and globalization.

To know about Unemployment click here

brainly.com/question/22741851

#SPJ4

8 0
1 year ago
Department E had 4,000 units in Work in Process that were 40% completed at the beginning of the period at a cost of $12,500. Of
JulijaS [17]

Answer:

Equivalent unit of conversion = Unit completed and transferred out+Ending WIP*Percent completion

= 15000+(3000*75%)

Equivalent unit of conversion = 17250

Total cost of conversion cost = 4500+32450+18710 = 55660

Cost per equivalent unit of conversion Cost = Total Cost/Equivalent unit = 55660/17250 = 3.23

6 0
3 years ago
Why is a consumer likely to be worse off when a product that he or she consumes is rationed?​
KIM [24]
When the price of the good is fixed at a level below the current (equilibrium) price, there will be a shortage of the good and the good will have to be effectively rationed. As in the question above, the consumer is worse off because she is not able to attain her utility maximizing point.
5 0
3 years ago
Which of the following is a limitation of the dividend-discount ​model? A. It cannot handle negative growth rates. B. It does no
topjm [15]

Answer:

B. It does not consider past earnings and performance.

Explanation:

\frac{divends}{return-growth} = Intrinsic \: Value

The formula use the expected nextyear dividends,

the expected growth on the dividends

and the cost of capital.

It doesn't include anything related to previous earnings and performarce. Like net income, net loss, increase in equity, increase in assets or any other variance about the company's composition of his capital and income.

8 0
3 years ago
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