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]
2 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]2 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
During fiscal 2016, Shoe Productions recorded inventory purchases on credit of $337.8 million. The financial statement effect of
iren2701 [21]

Answer:

A. Increase liabilities (Accounts payable) by $337.8 million

Explanation:

The journal​ entry will be: Inventory (Credit - Increased) 337,860,000 and Accounts payable (Debit - Increased) 337,860,000.

The company must recognize the increase in the Inventory and the medium of payment (Accounts payable).

B is false because this operationn can also be a decrease in cash, but the amount in the operation is too high for this payment medium.

C is false because, the inventory is not sold, and COSG will be increased when the goods are sold.

D is also false because the inventory is increasing, not decreasing.

6 0
2 years ago
Bruce, a first-line supervisor at Lou’s Market, regularly uses abusive and derogatory words when dealing with his subordinates.
Burka [1]

Answer:

The correct answer is Interpersonal.

Explanation:

Interpersonal justice refers to the perception of justice of employees in the interpersonal treatment they receive from those who have the power and the power to distribute the results (usually managers and managers). It is important for managers to be courteous and polite and treat employees with dignity and respect to promote interpersonal justice. In addition, managers and managers must refrain from making derogatory comments or belittling their subordinates.

4 0
2 years ago
Mike and David signed a loan agreement together to borrow money for a boat. If David leaves town and cannot be found, what happe
iren [92.7K]
<span>I this case, the loan is still valid and at that point Mike would be responsible for finding a way to pay the loan back as agreed upon in the contract. This is called co-signing, when two parties both sign for a loan together. Both parties are responsible for the loan and even though David cannot be found, the loan must still be paid and Mike would be held responsible for this.</span>
4 0
3 years ago
Read 2 more answers
These are steps in the decision-making process except for _____.
xenn [34]
Going With Your First mind Because It's Not In The Thinking Process
8 0
3 years ago
Read 2 more answers
Leslie has developed a new kind of running shoe, and now she is trying to decide where to sell it. Which of the 4Ps of marketing
Crank
A. Price : hope) ich
6 0
3 years ago
Read 2 more answers
Other questions:
  • For analysis purposes Jay considers his restaurant to have three revenue centers. These are the dining room, the bar and off-sit
    10·1 answer
  • If retention is so much more profitable than acquisition, why have companies persisted for so long in spending more on getting n
    6·1 answer
  • 1. The Statute of Frauds prevents the enforcement of a(n) ______ contract, which is a contract in which the parties have not ___
    10·1 answer
  • Select the four common tools managers use to analyze competitive intelligence and develop competitive advantages. a. The three g
    14·2 answers
  • The standard deviations of individual stocks are generally higher than the standard deviation of the market portfolio because th
    6·1 answer
  • LinkedIn is an example of a(n).<br> app?
    8·1 answer
  • Problem 8-12 (Algo) A firm uses a serial assembly system and needs answers to the following: a. An output of 800 units per shift
    5·1 answer
  • I need help with a class on e2020 the class is College and Career readiness need help fast ​
    5·1 answer
  • 1. Read the following data regarding payroll deductions, and answer the questions that follow:
    10·1 answer
  • 1. Please reflect on how the money multiplier concept can be an important tool of both expansionary as well as contractionary mo
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!