The PV gain is 0.56 for an arbitrageur.
<u>Explanation</u>:
PV of the strike price is 60e-(12 
4/12) = $57.65
PV of dividend is 0.80e-(12 1/12) = $0.79
where 5 < 64 - 57.65 - 0.79
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The arbitrageur should buy the option and short stock, this above condition is missing in 10.8 condition.
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The arbitrageur ought to contribute $ 0.79 of this at 12% for one month to deliver a profit of $0.80 in one month and the remaining $ 58.21 is put resources into four months in 12%, without considering the benefit that figures it out.
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If the stock price declines below $ 60 of every four months, the arbitrageur loses $ 5 spent on the choice however gains on an extremely short position, the arbitrageur shorts when the stock price is in $ 64 and deliver profit with PV of $ 0.79 and closes the short position when the stock price is $ 60 or less because $ 57.65 is the PV of $ 60 the short position generates at least 64-57.65-0.79 = 5.56
The PV gain at least 5.56-5.00
0.56
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If the stock price is above $60 at option when exercised and arbitrageur buys stock for $60 for four months and closes the short option. The PV of 60 is $57.65 and the dividend is 0.79 and gain in a short position and exercise the short option it results in 64-57.65-0.79= 5.56 and gains on PV is 5.56-5.0 = 0.56
Answer
The answer and procedures of the exercise are attached in the following archives.
Step-by-step explanation:
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
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Answer:
Kailua and Company
Schedule of Cash Collections
August September
Cash collections from June $25,200 $0
Cash collections from July $38,500 $19,250
Cash collections from August $17,220 $43,050
<u>Cash collections from September $0 $17,800 </u>
Total cash collections $80,920 $80,100
I suppose that 5% of the billings are uncollectible since 20% + 50% + 25% = 95%.
Answer:
disintermediation
Explanation:
Disintermediation refers to the practice of diminishing the use of intermediaries (middlemen) between consumers and producers in future transactions.
Erudite stopped selling its books through studysmart and set up its website to sell its books. This change in channel organization is called disintermediation.
