1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
AnnZ [28]
3 years ago
12

) You purchased a call option for $3.45 17 days ago. The call has a strike price of $45 and the stock is now trading for $51. If

you exercise the call today, what will be your holding period return? If you do not exercise the call today and it expires, what will be your holding period return?
Business
1 answer:
Anit [1.1K]3 years ago
6 0

Answer:

73.9%-100%

Explanation:

Calculation to determine If you exercise the call today, what will be your holding period return

First step is to find the Gross profit

Using this formula

Gross profit=Strike price- Stock Trading amount

Let plug in the formula

Gross profit =$51 - 45

Gross profit= $6

Second step is to find the Net profit

Using this formula

Net profit=Gross profit-Call option

Let plug in the formula

Net profit= $6 - 3.45

Net profit= $2.55

The last step is to find the Holding period return

Using this formula

Holding period return =Net profit/Call option

Let plug in the formula

Holding period return=$2.55/$3.45

Holding period return= 0.739*100

Holding period return =73.9%

Therefore what will be your holding-period return is 73.9%

You might be interested in
Can someone explain the relationship between consumer expectations and economic performance?
maks197457 [2]
If a consumer believes that the price of the good will be higher in the future he is more likely to purchase the good now. If the consumer expects that her income will be higher in the future the consumer may buy the good now. In other words positive expectations about future income may encourage present consumption.
5 0
3 years ago
Which two of the following tips are important to remember when writing a resume?
jonny [76]
<h2>The two of the following tips that are important to remember when writing a resume are: A) be clear and concise in the descriptions you use</h2><h2>D) use bullet points to organize your thoughts </h2>

Explanation:

Our resume should be clear and concise. If the resume is longer than one page, the employer may not go through it. One page resume shows that you are concise, clear, and to the point.

There should be absolutely no typos as spell check doesn’t fix everything!.

Personal information should not be added in the resume like relationship status, age, siblings.

We can list all the jobs that a person had in the past to show our experiments in different fields but it should be something related to the new job.

It is necessary to use bullet points to organize all our thoughts properly.

7 0
3 years ago
Buyers will often close the sale for you if you:
Ivenika [448]
If you want to buy it
6 0
3 years ago
Commissions charged on the trading of stock are
gtnhenbr [62]

Answer:

D. Charged on the buying and selling of stock.

Explanation:

Trade is defined as the action of buying and selling goods and services. And a trade commission is payed whenever an action is being traded, whether it is on the sale or on the buying.

8 0
3 years ago
Read 2 more answers
Last year Dania Corporation's sales were $525 million. If sales grow at 7.5% per year, how large (in millions) will they be 8 ye
Kipish [7]

Answer:

$936.33 Million

Explanation:

Current sales = $525 millions

Growth rate = 7.5%

Number of years = 10 years

Sales after 8 year = Current sales x (1+g)^{n}

Sales after 8 year = $ 525 million x (1+7.5/100)^{8}

Sales after 8 year = $ 525 million x (1+0.075)^{8}

Sales after 8 year = $ 525 million x (1.075)^{8}

Sales after 8 year = $ 525 million x 1.783477826

Sales after 8 year = $ 936.33 million

6 0
3 years ago
Other questions:
  • Choose a well-known company that you are familiar with, and explain how that company could use each of the five P's of the marke
    10·2 answers
  • When the risks of the individual components of a project’s cash flows are different, an acceptable procedure to evaluate these c
    14·1 answer
  • Brunette Company is contemplating investing in a new piece of manufacturing machinery. The amount to be invested is $180,000. Th
    6·1 answer
  • Arnez Company’s annual accounting period ends on December 31, 2019. The following information concerns the adjusting entries to
    6·1 answer
  • Would you rather have a savings account that offered simple interest, or an account that offered compound interest? Why?
    10·2 answers
  • Zoogle has the following selected data ($ in millions): (Round your answers to 2 decimal place. Enter your answers in millions (
    7·1 answer
  • A partnership intentionally created and recognized, orally or in writing is known as a(n) _____ partnership.
    8·1 answer
  • Helena is looking for an advisor who can help guide her as she invests. She also wants to reduce transaction and trading costs.
    11·1 answer
  • Arrow Printers paid $2,000 interest on short-term notes payable, $10,000 interest on long-term bonds, and $6,000 in dividends on
    6·1 answer
  • How many milliliters are in 1 quart?
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!