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kompoz [17]
3 years ago
8

Suppose VS's stock price is currently $20. A six-month call option on VS's stock with an exercise price of $15 has a value of $7

.14. What is the price of an equivalent put option? The six-month risk-free interest rate is 5% per six-month period.
a. $1.43
b. $9.43
c. $8.00
d. $12.00
Business
1 answer:
lutik1710 [3]3 years ago
3 0

Answer: $1.43

Explanation:

To solve this, we would use the put call parity. We then calculate the value of the out which will be:

= $7.14 + $15/(1 + 5%) - $20

= $7.14 + $15/(1 + .05) - $20

= $7.14 + $15/(1.05) - $20

= $7.14 + $14.29 - $20

= $1.43

The price of an equivalent put option is $1.43

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E) Trading company

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Which of the following statements about marketing is true? Multiple Choice A marketing exchange focuses on making a single trans
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It is understood that marketing only occurs when two or more parties are willing to exchange one thing for another thing.

5 0
3 years ago
Which is an example of someone who is cyclically unemployed?
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Explanation:

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What is a specific set of organizational practices, policies, and programs, plus a philosophy that actively supports efforts to
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The specific set of organizational practices, policies, and programs, plus a philosophy that actively supports efforts to help employees achieve success at both work and home considered is -work-life effectiveness. This is further explained below.

<h3>What is organizational practices?</h3>

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4 0
2 years ago
Grand Lips produces a lip balm used for​ cold-weather sports. The balm is manufactured in a single processing department. No lip
77julia77 [94]

Answer:

a. see attachment

b.

total equivalent units : Materials = 30,500 units and Conversion Costs = 16,860

cost per equivalent unit : Materials = $0.14 and Conversion Costs = $0.30

c.

(a) units completed and transferred to Finished Goods = $6,732

(b) units still in process at June 30 = $1,196

d.

<u>Journals</u>

Work In Process :Direct Materials $4,305 (debit)

Raw Materials $4,305 (credit)

<em>Being Raw Materials used in Production</em>

Work In Process :Direct Labor  $3,320 (debit)

Salaries Payable $3,320  (credit)

<em>Being Labor used in Production</em>

Work In Process ; Overheads $1,738 (debit)

Overheads $1,738 (credit)

<em>Being Overheads Assigned to Production</em>

Finished Goods $6,732 (debit)

Work In Process $6,732 (credit)

<em>Being Units transferred to Finished Goods</em>

Explanation:

<u>Calculation of Equivalent units of Production in respect with Raw Materials and Conversion Costs</u>

1. Materials

Ending Work In Process (5,200 × 100%)                                         5,200

Completed and Transferred Out (15,300 × 100%)                         15,300

Equivalent units of Production in respect with Raw Materials     30,500

2. Conversion Costs

Ending Work In Process (5,200 × 30%)                                            1,560

Completed and Transferred Out (15,300 × 100%)                         15,300

Equivalent units of Production in respect with Conversion Cost 16,860

<u>Calculation of Cost per Equivalent unit of production  in respect with Raw Materials and Conversion Costs</u>

Unit Cost = Total Cost ÷ Total Equivalent units

1. Materials

Unit Cost =  $4,305 ÷ 30,500

                = $0.14

2. Conversion Costs

Unit Cost =  ($3,320 + $1,738) ÷ 16,860

                = $0.30

3. Total unit cost

Total unit cost = Material Cost + Conversion Cost

                        = $0.14 + $0.30

                        = $0.44

<u>Calculation of costs assigned to (a) units completed and transferred to Finished Goods and (b) units still in process at June 30.</u>

(a) units completed and transferred to Finished Goods

Total Cost = units completed and transferred out × total unit cost

                 = 15,300 × $0.44

                 = $6,732

(b) units still in process at June 30.

Total Cost = Materials Cost + Conversion Cost

                 = $0.14 × 5,200 + $0.30 × 1,560

                 = $1,196

8 0
3 years ago
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