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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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Coastal Bank uses activity-based costing to determine the cost of servicing customers. There are three activity pools: teller tr
rosijanka [135]

Answer:Allocated MOH= $16

Explanation:

Giving the following information:

teller transaction processing ($2.80 per teller transaction)

check processing ($0.25 per canceled check)

ATM transaction processing ($0.20 per ATM transaction).

<u>To allocate overhead, we need to use the following formula:</u>

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 2.8*4 + 0.25*12 + 0.2*9

Allocated MOH= $16

4 0
3 years ago
What was the greatest percentage loss in your total portfolio?
Natasha2012 [34]

-2.99% was the greatest percentage loss in total portfolio.

Subtract the purchase price from the current price and divide the result by the asset's purchase prices to determine the net gain or loss in the portfolio. The above method can be modified to determine a portfolio's percentage return. You will base your calculations on the overall value of your portfolio rather than the stock's acquisition price and market value.

A stock portfolio is a selection of equities you purchase in the anticipation of a profit. You can become a more robust investor by assembling a varied portfolio that spans several industries.

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Complete Question:

You'll now need to do some math to compute the percentage change in the value of your total portfolio. For each monthly statement, add up the value of the two funds to get your total portfolio value at the end of that month. Compute the month to month percentage change of the value of your portfolio by subtracting the beginning value from the ending value and then dividing it by the beginning value . What was the greatest percentage loss in your total portfolio?

3 0
1 year ago
How are bonds rated? how are these rating helpful to the investors?​
Lorico [155]

Answer:

Independent agencies; reliability and stability

Explanation:

Bonds are securities which help to raise funds. Bonds generally rated by independent agencies, which rate bonds based on their performance and reliability. Independent agencies forecast the future prices of bonds based on historical data. Investors highly rely on bond ratings because it helps them to identify the best investment decision. Investors usually invest in bonds which are rated higher due to their reliability and future predictions.

8 0
3 years ago
You purchased 100 shares of ABC common stock on margin at $70 per share. Assume the initial margin is 50% and the maintenance ma
Zina [86]

A margin call would be issued if the stock price fell below $42.86.

Given initial margin 50% and maintenance margin 30%.

To find the stock price level to get a margin call.

When the value of assets in a brokerage account falls below a specific amount, known as the maintenance margin, the account holder is required to deposit extra cash or securities to fulfil the margin obligations. A margin call is a demand from a brokerage firm to boost the account's equity.

The formula to compute the margin call price is given below:

Margin call = \frac{1-Initial Margin}{1-Manitenance margin} * Purchase price

= \frac{1-0.50}{1-0.30} *60\\

=\frac{0.50}{0.70} *60\\=42.86

Therefore, the answer is $42.86.

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6 0
2 years ago
8
Lelechka [254]

Based on the explanation below, the economic concept that is applied in this statement is positive externality.

<h3>Meaning of positive externality</h3>

Positive externality can be described as a situation whereby the production or consumption of a commodity benefits some unrelated third party.

When education is consumed, for example, the consumer receives a private benefit, but there are also societal benefits.

Learn more about externalities here: brainly.com/question/14259859.

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5 0
2 years ago
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