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3 years ago

An investor has sold 1 ABC Jan 50 Call and has bought 1 ABC Apr 60 Call. This is a:________.

Business

1 answer:

Kitty [74]3 years ago

5 0

Answer:

diagonal spread

Explanation:

Spread is basically a sale and purchase of a call. So here the the types of spreads determine the relationship between the strike price and the expiration dates of all options involved in the trade.

In this example investor has sold 1 ABC Jan 50 Call and has bought 1 ABC Apr 60 Call. This means he bought the option ABC with the longer expiration date and with a higher strike price and sold the option ABC with the near expiration date and the lower strike price. Here both the expiration and strike price are different. So this is an example of diagonal spread.

The option horizontal spread is incorrect because it is a spread that depicts the difference in expiration dates but strike price is the same. Here both the expiration and strike price are different.

The option straddle is incorrect because it is a spread in which both options have the same expiry date and same strike price. Here both the expiration and strike price are different.

The option dialogue spread is not a valid option too.

The option Combination is also suitable because this is an example of Combination and combinations include option spread trades such as vertical spreads, horizontal spreads, and diagonal spreads.

So the most suitable option is diagonal spread which is an example of Combination.

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During the period, Sanchez Company sold some excess equipment at a loss. The following information was collected from the compan

Mice21 [21]

Answer:

Part 1

Cost of Equipment Sold = $9300

Accumulated Depreciation of Equipment Sold = $ 1100

Cash received from Sale = $5300

Part 2

Net Cash Flows from Operating Activities

Add Back (Positive) to Operating Profit for the year : Loss on sale of equipment $ 2900

Part 3

Net Cash flows from Investing Activities

Add (Positive) Proceeds from Sale of Equipment $ 5300

Explanation:

Part 1

Cost of Equipment Sold:

The figure is obtained from Equipment At Cost Account.

Open the Account as follows:

Beginning Balance $ 20300 (debit), Ending Equipment $ 11000, Balancing figure $ 9300 (20300-11000) is the cost of equipment sold.

Accumulated Depreciation of Equipment Sold

The figure is obtained from Accumulated Depreciation.

Open the Account as follows:

Beginning Balance $ 1980 (credit), Profit and loss - Depreciation $ 870 (credit), Ending Balance $ 1750 (debit), Balancing figure $ 1100 (1980+870-1750) is the Accumulated Depreciation on Equipment Sold

Cash Received on Sale

This figure is figure is obtained from Equipment Disposal Account.

Open the Account as follows:

Cost of Equipment Sold $ 9300 (debit), Accumulated depreciation on equipment sold $1100(credit),Loss on Sale of Equipment $2900(credit),the Balancing figure $5300 (9300-1100-2900)

Part 2

Loss on sale of Equipment is the only Income Statement Item affecting the Operating Activity of the Cash Flow Statement.

Add back to Operating profit since this is a non-cash item and was initially deducted in the calculation of Operating Profit.

Part 3

Sale of Equipment results in Cash Inflow and affects the Cash Flows from Investing Activities Section of Cash Flow Statement.

Hence a positive amount should be added to reflect this inflow.

4 0

4 years ago

Gabriella, a manager, hires the first person she interviews because she believes that person can do the job adequately. Gabriell

bixtya [17]

Gabriella, a manager, hires the first person she interviews because she believes that person can do the job adequately. He is solving the problem.

<h3>What is problem-solving?</h3>

It is the process of identifying a problem, finding and selecting possible solutions to the problem. An alternative solution can also be used.

The process of identifying the best fit for a job provides the solution to shortage or lack of the best fit staff.

Therefore, Gabriella is solving the problem by hiring the first person she interviews because she believes that person can do the job adequately.

For more details on problem-solving kindly check brainly.com/question/10708306

8 0

3 years ago

Glover Corporation issued $2,000,000 of 7.5%, 6-year bonds dated March 1, with semiannual interest payments on September 1 and M

Stels [109]

Answer: This could be explained as below :-

Explanation:

A. Bonds were issued for $97 with par value of $100, hence they were issued on discount.

B. Market rate was higher, as company issued bonds on discount.

C. Amortization = $2,000,000 * 7.5% * 10/12 = $125,000

Discount = $60,000/6 * 10/12 = $8,333

Total interest expense = $125,000 + $8,333 = $133,333

D. Carrying value = $2,000,000 - $51,667 ($60,000 - $8,333) =$1,948,333

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4 years ago

Maria is purchasing a new car whose MSRP is $22,450. She is trading in her old car for $7000 and being upgraded to a premium pac

kupik [55]

It should be $20,150

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4 years ago

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Which of the following is a unique feature of credit unions?

Mkey [24]

D) Both A & B
a)Credit unions are typically owned and run by their members
b)Credit unions limit membership to certain people or groups

4 0

3 years ago

Read 2 more answers