Answer:
The correct answer is letter "D": All securities in an efficient market are zero net present value investments.
Explanation:
The Efficient Market Hypothesis (EMH) states that neither public or insider information cannot help in an attempt to beat the market because stocks already show all available information possible. Thus, neither using technical or fundamental analysis could be useful to predict future stock price movement.
<em>In other words, in a market under EMH all stocks are zero Net Present Value (present value inflows minus present value outflows) investment vehicles.</em>
Answer:
C, the board of directors of IFS
Explanation:
The board of the IFS is ultimately responsible for the corporate climate that resulted in the use of substandard ingredients in the meals meant for the troops.
This is because the directors are the ones at the helm of affairs and they decide what happens in the IFS. This means that at least one of the directors is aware of the use of substandard ingredients . It can be said that if one knows, all other know. This phrase convieniently indicts the directors.
Cheers.
Answer:
a. 3.58
Explanation:
the price earning ratio is obtain with the following formula:
We are given with the market price, now we need to solve for the EPS
with sales and profit margin we solve for net income. then we divide by the shares outstanding to get the EPS
823,000 sales x 4.2 profit margin = 34.566 net income
now we solve for EPS Earning per share:
Now we can sovle for price-earnings ratio
16.50/4.61 = 3,5791 = 3.58
Answer: a. The black-scholes call price for 1 year is 0.
For 10 years it is also 0.
Option price did not change.
b. When δ is 0.001, the black-scholes call price for 1 year is 450.012.
For 10 years it is 450.0012.
The option price changed from 450.012 to 450.0012.
The difference was due to the change of δ value from 0 to 0.001.
Explanation: using the black-scholes equation below option price is callculated based on the given values.
δk/δt+1/2σsquare×Ssquare×δsquare×k/δS+rS×δk/δS-rk=0
By calculations the options prices were obtained for the first value of δ=0 both for 1 year and 10 years and compared with when the value of δ was changed to 0.001
A change in option price was also observed as the δ values changed this lead to the difference observed.
You can pray to God and he will help you
