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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

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The following information is available regarding the total manufacturing overhead of Olsen Company for a recent four-month perio
Eduardwww [97]

Answer:

$33,000

Explanation:

The calculation of the fixed cost and the variable cost per machine hour by using high low method is shown below:

Variable cost per hour = (High manufacturing overhead cost - low manufacturing overhead cost) ÷ (High machine hours - low machine hours)

= ($198,000 - $153,000) ÷ (110,000 hours - 80,000 hours)

= $45,000 ÷ 30,000 hours

= $1.5

Now the fixed cost is

= High manufacturing overhead cost - (High machine hours × Variable cost per hour)

= $198,000 - (110,000 hours × $1.5)

= $198,000 - $165,000

= $33,000

6 0
3 years ago
For a normal good, if the price of a substitute good decreases then:
geniusboy [140]

Answer:

(B) the demand curve shifts leftward while the supply curve stays the same.

Explanation:

"Substitutes are goods where you can consume one in place of the other. The prices of complementary or substitute goods also shift the demand curve. When the price of a good that complements a good decreases, then the quantity demanded of one increases and the demand for the other increases. When the price of a substitute good decreases, the quantity demanded for that good increases, but the demand for the good that it is being substituted for decreases. "

Reference: Khan Academy. “Price of Related Products and Demand.” Khan Academy, Khan Academy, 2019

8 0
3 years ago
Demand pull inflation can be started by A. an increase in the price of oil B. a decrease in the quantity of money. C. an increas
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Answer:

Option "C" is correct.

Explanation:

An increase in government expenditure causes more money inflow on demand over supply.

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3 years ago
What are the two most important cost considerations in queuing​ problems?
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B is the answer I think
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Growth has which positive effect for businesses?
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Answer:

A. It widens the area inside the frontier on a production possibilities

curve.

Explanation:

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