Answer:
A) $1,000 gain
Explanation:
When a client buys a straddle, he is purchasing a call and a put option on the same stock with the same strike price and expiration date.
this client bought 5 ABC Jan 30 calls and 5 ABC Jan 30 puts:
each contract was worth $700 (= $3,500 / 5 contracts)
If the price of the stock fall below $30, the call option will not be taken, but the put option will be enforced. Since the value of the stock is $21, this means that the put option resulted in a $900 profit (= ($30 - $21) x 100).
The client paid $700 for each option, therefore his profit per option = $900 - $700 = $200
His total profit = $200 x 5 options = $1,000
The correct answer is - elaboration.
By using the diversity of information that exists within different teams, the sharing as well as expansion of the knowledge is simply known as elaboration.
Elaboration of Information
- In communication within the organisation and various teams, the transfer of information is the most crucial step of the entire process.
- While doing the processing of information, the important strategy that is followed is “elaboration”.
- It focuses on the diversity of the information which is very crucial and sometimes can be complex but crucial.
- It helps in using the diverse resources of different teams in order to reach the solutions of the complex problems.
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Answer:
Used for complex operations or introduction of new equipment
Answer:
If GDP and consumption both rise by $6 billion in the second round of the process, what is the MPC in this economy?
What is the size of the multiplier?
If, instead, GDP and consumption both rose by $8 billion in the second round, what would have been the size of the multiplier?
Explanation:
Since the change in consumption is $6 billion, and the initial expansion in investment was $10 billion, the marginal propensity to consume (MPC) = expansion in consumption / initial expansion = $6 / $10 = 0.6
the economy's multiplier = 1 / (1 - MPC) = 1 / (1 - 0.6) = 1 / 0.4 = 2.5
If both the economy and the GPD had expanded by $8 billion, the MPC = $8 / $10 = 0.8, so the economy's multiplier = 1 / (1 - 0.8) = 1 / 0.2 = 5
Another way to determine the multiplier = 1 / MPS (marginal propensity to save), since MPS = 1 - MPC
Answer:
Indicating whether the expenditure should be capitalized or expensed in the period incurred:
a. Improvement = capitalized
b. Replacement of a minor broken part on a machine = expensed
c. Expenditure that increases the useful life of an existing asset = capitalized.
Explanation:
The expectation of costs producing an economic benefit beyond the current year or within the normal course of an operating cycle determines whether to capitalize or expense the costs. When an item of expenditure is capitalized, it means that the expense recognition is delayed. When the cost is expensed, it is treated as an expense in the income statement, whereas a capitalized cost is taken to the balance sheet, with only the depreciation expense portion recognized as expense for the period.
