A bond that pays interest annually yielded 7.37 percent last year. The inflation rate for the same period was 2.4 percent. What
1 answer:
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Answer:
Answer is explained in the explanation section.
Explanation:
Solution:
Data Given:
Price of Oven Only = $800
Price of Oven with installation services = $850
Price of Oven with maintenance services = $975
Price of Oven with Installation and maintenance = $1000
So, with this data, we can calculate the total price of the oven:
Total Price = $800 + 50 + 175 = 1025
Now, we need to find out the allocation of price to the oven by using the following formula:
PA = Price Allocation
PA = (Price of Oven Only divided by Total Price) multiplied by the Price paid by the customer.
So,
We have all the values, just plugging in the above equation:
PA = x $1000
PA = $780.48 is the price allocation for Oven.
Similarly, we need to find the Price allocation of maintenance services:
PA = (Price of maintenance Only divided by Total Price) multiplied by the Price paid by the customer.
PA = x 1000
PA = $170.73 is the amount that must be allocated to the maintenance services.
Similarly, for Installation services:
PA = (Price of installation Only divided by Total Price) multiplied by the Price paid by the customer.
PA = x 1000
PA = $48.78 is the price allocation for installation services.
Answer:
Put options give the holder the right to sell the underlying stock to the seller of the put option.
Put options are advantageous when the price in the market falls below the strike price of the option because the buyer will be able to sell at above market value and make a profit.
The asking price for a strike price of $9.00 is listed to be $0.33 and this is the premium paid by the buyer of the Put Option.
<h2>1. Return if stock sells for $8.00</h2>
= Amount received/ Amount spent
= (No. of shares * ((Strike price - Market price) - Premium paid) ) / (No. of share * premium)
= (2,300 shares * (($9.00 - 8.00) - 0.33))/ ( 2,300 * 0.33)
= 2.03
= 203 %
<h2>2. Return if stock sells for $10.00. </h2>As this is an option, the investor can decide not to sell to the seller. The market price is higher than the strike price so they will not sell to the seller of the option and the return will be;
= (No. of shares * - Premium paid) ) / (No. of share * premium)
= (2,300 shares * - 0.33)/ ( 2,300 * 0.33)
= -1
= -100 %
