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PtichkaEL [24]
3 years ago
9

You are long 2 contracts of 1-yr call on MSFT with strike (K) of $220, and also long 2 contracts of 1-yr call on MSFT with strik

e (K) of $120. What will be your payoff if MSFT price at expiry (S_T) is $250
Business
1 answer:
Dafna1 [17]3 years ago
7 0

Answer:

The correct answer is $320.

Explanation:

According to the scenario, computation of the given data are as follows:

MSFT price at expiry (S_T) = $250

MSFT with strike (K) Contract 1 = $220

MSFT with strike (K) Contract 2 = $120

So, we can calculate the payoff by using following formula:

Payoff = [(Stock price at expiry (ST) - Strike price of $220)] + [(Stock price at expiry (ST) - Strike price of $120)]

BY putting the value, we get

Payoff =  ($250 - $220) + ($250 - $120)

= $30 + $130

= $160

As there are 2 contracts, then

Total payoff = $160 × 2

= $320

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Gemiola [76]

Answer:

B. False

Explanation:

The target of service provision are the customers. So service providers must ensure that their targets are obtaining maximum satisfaction from the quality of service they provide and one way of doing this is by asking feedback from customers

8 0
3 years ago
Read 2 more answers
Question 2 (2 points)
frez [133]

Answer:

C) Classification of products

Explanation:

Advertising is not a means of classifying products.

Advertising is a commercial process of marketing goods and services to a target group of people.

  • Advertising is a means of making a product known the the general market population.
  • It helps to increase the market share of a particular product among competitors.
  • When an advert is done rightly, it can bring more revenue to the company.
  • Also, it reinforces brand recognition.
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3 years ago
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You bought two new CDs with the last $30 in your checking account, and your next payday is on Monday. What is the opportunity co
bixtya [17]

Answer:

the $30 check that you wrote for the cds

6 0
3 years ago
2 x (3a-b) - 3y(b-3a)​
pantera1 [17]

Answer:

6ax+9ay−2bx−3by

Explanation:

2x(3a−b)−3y(b−3a)

Distribute:

=(2x)(3a)+(2x)(−b)+9ay+−3by

=6ax+−2bx+9ay+−3by

6 0
2 years ago
Simon Corporation manufactures hydraulic valves. The product life of a valve is 4 years. Target average profit margin for Simon
Luda [366]

Answer:

Allowable unit cost of a hydraulic valve using the target costing model = 52.4

Explanation:

Given that:

Simon Corporation manufactures hydraulic valves. The product life of a valve is 4 years.

Target average profit margin for Simon 20.00%

The company does not expect the manufacturing cost to vary over the next 4 years

Estimated sales volume and the unit selling price of the valve for the next 4 years is given below:

Year                  Sales volume (units)                   Unit selling price

Year 1                       40,000                                 $80.00

Year 2                      50,000                                 $75.00

Year 3                     35,000                                   $50.00

Year 4                      25,000                                  $45.00

The objective is to determine the allowable unit cost of a hydraulic valve using the target costing model.

The Cost for each unit selling price can be calculated as:

= unit selling price - (Target average profit margin × unit selling price)

For Year 1

=  $80.00- (0.2 × $80.00)

= $80.00 - $16.00

= $64.00

For Year 2

= $75.00 - ( 0.2 × $75.00)

= $75.00 - ( $15.00)

= $60.00

Year 3

= $50.00 - (0.2× $50.00)

= $50.00 - $10.00

= $40.00

Year 4

= $45.00 - (0.2 × $45.00)

=$45.00 - $9.00

= $36.00

Year       Sales volume    Unit                Cost          Cost per Unit

                (units)             selling price  

Year 1       40,000          $80.00          $64.00       $2560000

Year 2      50,000          $75.00          $60.00       $3000000

Year 3      35,000          $50.00          $40.00        $1400000

Year 4       25,000          $45.00         $36.00        $900000

Total:        150000                                                    $7860000

Allowable unit cost = Total cost/Total number of unit cost

Allowable unit cost = $7860000/150000

Allowable unit cost = 52.4

6 0
3 years ago
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