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ELEN [110]
3 years ago
12

Assume that the current price of a stock is $80 and that 1 year from now the stock will be worth either $90 or $75. The exercise

price of a call option for this stock is $74. Assuming a riskless interest rate of 6% per year (and discrete compounding), what is the call option price
Business
1 answer:
ollegr [7]3 years ago
8 0

Answer: $17.71

Explanation:

Calculation of delta = (90 - 74) + (75 - 74) / 90 - 75

= 16 + 1 / 15

= 1.13

Calculation of futurevalue of portfolio = (90 * 1.13) - 16 = 85.7

Present value of portfolio = 85.7 / 1.03 = 83.20

Present value of delta share = 74 * 1.13 = 65.49

Value paid by call holder = 83.20 - 65.49 = 17.7

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The Federal Reserve S role as a lender of last resort involves lending to which of the following financially troubled institutio
ANTONII [103]

Answer: U.S. banks that cannot borrow elsewhere

Explanation:

Lender of last resort is.a situation that occurs when the central bank in a country gives loans to the commercial banks in the country when they are going through financial difficulties.

In this scenario, The Federal Reserve S role as a lender of last resort involves lending to U.S. banks that cannot borrow elsewhere.

5 0
3 years ago
The CPI is based on an: Multiple Choice average of the goods and services purchased by "urban consumers." average of the goods a
lisabon 2012 [21]

Answer:

average of the goods and services purchased by "urban consumers."

Explanation:

The US Bureau of Labor Statistics determines the CPI by calculating the weighted average of a basket of goods. More than 24,000 people are interviewed each year in order to elaborate this index, and the sample is taken from the US Census and includes people that live or work in urban areas around the country.

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3 years ago
The 7 types of management styles
QveST [7]
1. autocratic

2. consensus

3. delegating

4. supporting

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7 0
3 years ago
Which is NOT a money management skill discussed in the reading material?
aleksandrvk [35]

Answer:

Option B. Managing your time in a healthy manner

Explanation:

The reason is that the money management moves around the money and managing time has no association with the money savings or money generation or money spending. So the things that matter while managing the flow includes the estimation of cash outflow and inflow in the coming period, budgeting the cash flow, least cash amount required to tackle emergent issues and other issues like opening saving account, short term investment, etc.

4 0
3 years ago
Which of the following personal decisions could have an effect on your job? a. Staying up late at night causing you to be tired
algol [13]

Answer:

d. All of the above

Explanation:

Every workplace has its written and unwritten rules, regulations, and social conventions.

Staying up late which would make an employee sluggish at work, choosing to wear pajama pants in a formal office meeting, and inviting loud and rowdy friends to your workplace would definitely have a negative effect on one's job because those decisions and behavior are unprofessional.

6 0
3 years ago
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