1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
blsea [12.9K]
3 years ago
8

QUESTION 22 You purchase one IBM July 125 call contract for a premium of $5. You hold the option until the expiration date, when

IBM stock sells for $123 per share. You will realize a ______ on the investment. $200 profit $200 loss $500 profit $500 loss
Business
1 answer:
NikAS [45]3 years ago
6 0

Answer:

$500 loss

Explanation:

Since you purchased a call contract for IBM stock, you had the option to buy IBM stock at a specified price ($125) within a specified time (?). The problem is that the price of your call contract was higher than the market price at that specific date. Obviously you will not exercise your option in order to limit your losses.

long call profit = Max [0, (current stock price - strike price) x number of shares] - premium paid)

where:

  • current stock price = $123
  • strike price = $125
  • number of shares = 100
  • premium paid = $5 x 100 = $500

long call profit = Max [0, ($123 - $125)(100)] - $500 = -$500

You might be interested in
If the potential gross rental income from a property is $20,000, the vacancy rate is 5 percent, and the additional income from t
Serggg [28]

Answer: The correct answer is 19,700

6 0
2 years ago
If reserves in the banking system increase by $100, then checkable deposits will increase by $500 in the model of multiple depos
const2013 [10]

Answer:

d. 0.2

Explanation:

D = 500

R = 100

D*rr = R

500*rr = 100

rr = 100/500

   = 0.2

Therefore, The required reserve ratio is a 0.2

6 0
3 years ago
Direct Materials and Direct Labor Variance Analysis
ValentinkaMS [17]

Answer:

use socratic its in the app store

Explanation:

5 0
2 years ago
A positive shift in attitude occurs as a result of ___________.
brilliants [131]
Hardwork is right answer
7 0
3 years ago
Which of the following statements is the most correct regarding errors and fraud? Group of answer choices Errors are always frau
Sergio039 [100]

Answer:

An error is unintentional, whereas fraud is intentional.

Explanation:

Financial accounting is an accounting technique used for analyzing, summarizing and reporting of financial transactions like sales costs, purchase costs, payables and receivables of an organization using standard financial guidelines such as Generally Accepted Accounting Principles (GAAP).

An auditor refers to an authorized individual who review, examine and verify the authenticity and accuracy of business financial records or transactions.

Thus, an audit of historical financial statements most commonly includes the balance sheet, income statement, statement of cash flows, and the statement of changes in stockholders' equity.

Hence, the statement which is the most correct regarding errors and fraud is that, an error is an unintentional that can happen to any financial expert, whereas fraud is intentional.

3 0
2 years ago
Other questions:
  • Clement applies for a home loan at Global Bank Inc. As part of the process, he provides his personal details to the banker who i
    11·1 answer
  • Why would banks offer lower interest rates for loans?
    5·2 answers
  • In coming years, high-tech growth areas such as computers, biotechnology, and robots are likely to experience a:
    14·1 answer
  • ) In April of 2019, Mike acquired a machine for $30,000 to use in his business. It is the only plant asset he purchased this yea
    14·1 answer
  • Calculating Residual Income Pelican Manufacturing earned operating income last year as shown in the following income statement:
    10·1 answer
  • I need help on this question please
    12·1 answer
  • BBB Leasing purchased a machine for $280,000 and leased it to Jack Tupp Auto Repair on January 1, 2021. Lease description: Quart
    11·1 answer
  • In coffee, cherry picking, the process of ________picking is the practice of harvesting only the ripe coffee cherries.
    6·1 answer
  • Although entrepreneurs expect to succeed, they must be realistic and recognize that they are taking a(n) because many small busi
    5·1 answer
  • a tech company decides to pay dividends to shareholders out of its net earnings. this will decrease its
    15·2 answers
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!