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PolarNik [594]
4 years ago
11

Suppose you believe that basso inc.'s stock price is going to increase from its current level of $22.50 sometime during the next

5 months. for $3.10 you can buy a 5-month call option giving you the right to buy 1 share at a price of $25 per share. if you buy this option for $3.10 and basso's stock price actually rises to $45, what would your pre-tax net profit be?
Business
1 answer:
JulijaS [17]4 years ago
6 0

The pre-tax net profit can be calculated using the formula:

Net Profit = Final Stock Price – Buying Cost – Option Cost

Substituting the given values into the equation will result in:

Net Profit = $45 - $25 - $3.10

<span>Net Profit = $16.90</span>

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3 years ago
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When Aubey Aircraft´s depreciation and amortization decrease, it has less cost of sales and an improvement in the Gross Margin, hence,  in the Net Income, but this enhancement in the Net Income has an opposite effect on Net Cash Flow because less depreciation and amortization means less Net Cash Flow,  

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The money demand function for an economy is given by (M/P)d = (0.6Y)/(i1/2). If output is 1,000 units, the nominal interest rate
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