Answer:
$400
Explanation:
From the question, there is a butterfly spread when a trader buys 100 options with strike prices $60 and $70 and sells 200 options with strike price $65.
The maximum gain is the point where both the stock price and the middle strike price are equal, i.e. equal to $65. At that point, the options payoffs are respectively $500, 0, and 0. By implication, the total payoff is $500.
The set up cost of the butterfly spread can be calculated as follows:
Setup cost = ($11×100) + ($18×100) – ($14×200)
= 1,100 + 1,800 – 2,800
Setup cost = $100
Net gain = Options payoffs – Setup cost = $500 - $100 = $400
Therefore, the maximum net gain (after the cost of the options is taken into account) is $400.
Answer:
Either A or E (probably more A)
Hope this helps :)
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Answer: Option D
Explanation: A frontier of development possibilities determines the set of choices made by society for the mixture of goods and services it can create, given the available resources capacity. Usually considered for an economy, this balancing act extends to every ordinary citizen, and the economic institution as well.
This curve depicts the fact that only by reallocating resources from other goods and thus producing less of them can one good be produced as the resources in hand for production is limited.
Hence from the above we can conclude that the correct option is D.
Answer:
So then the correct answer on this case would be:
D) decreases by 10.
Explanation:
For this case we assume that we have a linear model given by this expression:
Where m is the slope on this case m=6 and b the intercept.
So our model is given by: 
We want to see that if we decrease the value of y on 60 units what would be the change on the x axis.
Let's assume that we have two points 
and 
If we find the differences between those points we got:
And we can rewrite this like that:
And if we know that 
then we can solve 
like this:
So then the correct answer on this case would be:
D) decreases by 10.
