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trapecia [35]
2 years ago
13

A tree is constructed to value an option on an index which is currently worth 100 and has a volatility of 25%. The index provide

s a dividend yield of 2%. Another tree is constructed to value an option on a non-dividend-paying stock which is currently worth 100 and has a volatility of 25%. A. The parameters p and u are the same for both trees B. The parameter p is the same for both trees but u is not C.The parameter u is the same for both trees but p is not D. None of the above
Business
1 answer:
ZanzabumX [31]2 years ago
4 0

Answer:

A. The parameters p and u are the same for both trees

Explanation:

Calculation of parameters of u(upper limit) and p(lower limit) for both index and stock:

1) INDEX

Current Value: 100

Volatality : 25%

Value can increase upto 100+25% = 125

Value can decrease to 100-25% = 75

U = Value after increase/current value = 125/100 = 1.25

P = Value after decrease/ current value = 75/100 = 0.75

2) STOCK

Current Value: 100

Volatality : 25%

Value can increase upto 100+25% = 125

Value can decrease to 100-25% = 75

U = Value after increase/current value = 125/100 = 1.25

P = Value after decrease/ current value = 75/100 = 0.75

---> The parameters U and P for both index and stock are same. This is because both the index and stock has  same value and same volality rate. Therefore, stock move according to the index.

if index changes by  certain percentage the stock also changes. Here in this case, volatality rate is same for both index  and stock. Hence Parameters U and P are same for Index and Stock.

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Last season at City Opera House, far more people attended opera X than opera Y. However, opera Y generated far greater net profi
ryzh [129]

Answer:

c. a difference in the subject matters of operas X and Y

Explanation:

All factors could directly explain the fact that opera Y generated far greater net profits that did opera X except for this one. Although the subject matter might have some impact on sales, it could not do so in a direct way. It could only do so if we take other factors into account, such as the cost of producing a particular opera or the interest that people have on an opera (which results in greater or lesser ticket sales).

6 0
3 years ago
g An automobile dealer expects to sell 529 cars a year. The cars cost $11,000 plus a fixed charge of $500 per delivery. If it co
harkovskaia [24]

Answer:

Order size = 23 cars

The number of orders = 23

Explanation:

The economic order quantity (EOQ) is the order size that reduces the balance of holding and ordering cost. It is to be noted that at EOQ, the carrying cost is equal to the holding cost.

The EOQ is computed as shown below;

= √ 2 × Co × D)/Ch

Co = Ordering cost

D = Annual demand

Ch = Carrying cost

EOQ = √ 2 × 500 × 529 / 1,000

EOQ = 23

Number of cars to be ordered per time, I.e optimal order size = 23

Order size = 23 cars

2. The number of times orders should be placed per year would be calculated as;

Number of orders = Annual demand / Order size

Number of orders = 529 / 23

Number of orders = 23

4 0
2 years ago
Brandon is in a band. His band has recently produced a new song. Which intellectual property law best protects the band's song f
wlad13 [49]

Brandon is in a band. His band has recently produced a new song. Which intellectual property law best protects the band's song from being stolen or reproduced by others is Copyright.

<h3>What is Copyright? </h3>

Original works of authorship are protected by copyright, a type of intellectual property, as soon as the author fixes the work in a tangible form of expression.

A product that is considered creative and that takes a lot of mental effort to generate is considered intellectual property and needs to be protected from unlawful replication.

Computer programs, works of art, poetry, graphic designs, musical lyrics and compositions, novels, films, innovative architectural designs, website material, etc. are examples of unique inventions. Copyright is one measure that can be taken to formally protect an original creation.

Hence, Brandon is in a band. His band has recently produced a new song. Which intellectual property law best protects the band's song from being stolen or reproduced by others is Copyright.

To know more about Copyright follow the link.

brainly.com/question/16774161

#SPJ2

3 0
1 year ago
Read 2 more answers
Rex Garner recently made an offer to Harry Barns for the sale of his shop using a registered letter. The offer says that Harry "
NeX [460]

Answer:

Stipulation.

Explanation:

In this scenario, Rex Garner recently made an offer to Harry Barns for the sale of his shop using a registered letter. The offer says that Harry "may accept by registered letter." This detail is an example of a stipulation.

A stipulation in business can be defined as a formal legal acknowledgment and agreement made between two or more groups of people (parties) before entering into a contract or business deal.

This ultimately implies that, a stipulation is a condition or clause used to convey agreement in a contract between two or more groups of people. The statement "may accept by registered letter." in the offer made by Rex Garner to Harry is a stipulation, conveying the message that Harry can only show agreement by using a registered letter as well.

5 0
2 years ago
What are the three elements of business equipment and resource?​
just olya [345]

Explanation:

No matter how bold or ambitious your plans are to grow your business, the key to your business's success lies in three critical, interdependent components: operational excellence, customer relations/communications and financial management.

5 0
2 years ago
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