Answer:
a.) The proportional up movement , u, for the currency can be calculated using the following formula:
u = eStd Dev * Square root of t
u = e0.06*square root of 0.25
u = 1.0305
b.) Probability of up movement, p , = (a - d) / (u - d)
where a = ert where r = 0.025, t = 0.25
a = e0.025*0.25 = 1.0063
d = 1 / u = 1 / 1.3050 = 0.7663
p = (1.0063-0.7663) / (1.3050-0.7663)
p = 0.46
1-p = 1-0.46 = 0.54
c) Price of an American Call Option on the currency : we use binomial tree for that , as follows: The amounts below line indicate the option price and figures above line indicate the underlying asset price which is 0.55555
Adam Smith is known as the Father of Modern Economics and is known as the author of "The Wealth of Nations". According to the passage above, the idea of Adam Smith that made Mark think of starting a restaurant business is self-interest. The correct answer is option B. Self-interest, according to Adam Smith, is when the individual owns the resources available, labor and capital, can make voluntary decisions to control the marketplace. This is the biggest motivator in the activity in the economy.
Answer:
c. That business must be related to the taxpayer's present business for any expense ever to be deductible.
Explanation:
If the business is acquired, the expenses may be deducted immediately by a taxpayer engaged in a similar trade or business. The expenses may be deducted regardless of whether the business being investigated is acquired.
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