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wolverine [178]
3 years ago
12

The current stock price of Alcoco is $70, and the stock does not pay dividends. The instantaneous risk-free rate of return is 6%

. The instantaneous standard deviation of Alcoco's stock is 40%. You want to purchase a put option on this stock with an exercise price of $75 and an expiration date 30 days from now. According to the Black-Scholes OPM, you should hold ________ shares of stock per 100 put options to hedge your risk.
a) 34
b) 74
c) 30
d) 69
Business
1 answer:
vekshin13 years ago
3 0

Answer:

a) 34 is the answer hope this helps

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A company had a beginning balance in retained earnings of $430,000. It had net income of $60,000 and paid out cash dividends of
snow_lady [41]

Answer:

Ending retained earning will be $433750

Explanation:

We have given beginning balance = $430000

Net income = $60000

Dividend paid = $56250

We have to find the ending balance

We know that ending retained earning is given by

Ending retained earning = beginning retained earning + net income - dividend paid

So Ending retained earning = $430000+$60000-$56250 = $433750

6 0
3 years ago
Problem 5-30 Graphing; Incremental Analysis; Operating Leverage [LO5-2, LO5-4, LO5-5, LO5-6, LO5-8][The following information ap
WARRIOR [948]

Answer:

Break Even Point

In Units = 2,000 units

In value = $80,000

Explanation:

Break even Point = \frac{Fixed\ Cost}{Contribution}

When we use contribution per unit, we get the break even point in units sales.

When we use the contribution margin as a percentage of sales we get break even sales in value.

Contribution per unit = $20

Contribution margin in percentage = $20/$40 = 50%

Therefore, Break even Point in units = \frac{40,000}{20} = 2,000

Break even units = 2,000

Break Even Point in value = \frac{40,000}{0.50} = 80,000

Sales to be made in value at break even = $80,000

8 0
3 years ago
Price Company’s note receivable is receivable from Score Company. Interest of $7,520 was paid by Score to Price during 2015. Any
Minchanka [31]

Answer:

Please see attachment

Explanation:

Please see attachment

7 0
3 years ago
Ken consumes two goods, Sprite and potato chips. Sprite costs $1 per can, and he consumes it to the point where the marginal uti
borishaifa [10]

Answer:

The correct option is c. $8.

Explanation:

Ken will maximize utility where the following equation holds:

MU of Sprite / Price of Sprite = MU of potato chips / Price of potato chips ................. (1)

Where;

MU of Sprite = Marginal utility of Sprite = 3

Price of Sprite = $1 per can

From the table in the question, equation (1) holds at the point where Marginal utility of potato chips is 6 since the Potato chips cost $2 per bag.

Substituting the values into equation (1), we have:

MU of Sprite / Price of Sprite = MU of potato chips / Price of potato chips => 3 / 1 = 6 / 2 = 3

Since when the marginal utility of potato chips that maximizes utility is 6, Ken consumes 4 Bags of Potato chips monthly and pays $2 per bag at this point, the amount he spends on potato chips each month can be calculated as follows:

Amount spent on potato monthly = Number of bags of Potato chips consumed monthly * Cost of potato chips per bag = 4 * $2 = $8

Therefore, the correct option is c. $8.

3 0
2 years ago
Uber’s strategy has been to break these regulations, establishing its service first, and then fighting attempts by regulators to
aleksley [76]

Answer: No it is not.

Explanation:

Uber by first establishing itself and then fighting regulators leaves itself open to attack around the world. This is because the Regulators have the power to keep adjusting the laws that govern Uber if they feel that Uber has an unfair advantage or if it's existence is detrimental to the society. Uber has been accused many times of various infractions such as Tax Evasions and being a conduit through which crime can be committed because it did not conduct proper background checks.

Going back to the issue of taxes, if the regulators feel that Uber may be avoiding taxes, they could impose laws that either cause an increase in Uber prices or remove them from a location which can have a native influence on Uber's bottomline.

This approach is not good because regulators do not like being fought and will try to ascert dominance. It is simply not viable and this has been proven with Uber's many suspensions around the world.

8 0
2 years ago
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