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KatRina [158]
3 years ago
8

Stock Z is trading at $50 today. In one year, the value will go either up to $62.50 or down to $40. A call option on Z with exac

tly one year to expiration has a strike price of $55. Inflation is high, so the interest rate is 10% per year. Find the delta of the call option using binomial approach. a. 0.25 b. 0.67 c. 1.05 d. 0.33
Business
1 answer:
PilotLPTM [1.2K]3 years ago
5 0

Answer:

0.33

Explanation:

Delta = (Cu – Cd)/(Su – Sd)Cu

= 62.50 – 55 = 7.50

Cd = 0

Delta = (7.50 – 0)/(62.50 – 40)

= 0.33

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Answer:

$1.8 Unfavourable

Explanation:

Labor usage variance can be calculated by deducting Standard hours from Actual hours and multiplying the result by the standard rate.

DATA

Standard hours = 1.50 hours

Standard rate = $12/hour

Actual hours = 1.65 hours

Actual rate = $11.5/hour

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LABOUR USAGE VARIANCE = (SH-AH)SR

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LABOUR USAGE VARIANCE = (-0.15) x $12

LABOUR USAGE VARIANCE = $1.8 Unfavourable

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1 year ago
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6 0
2 years ago
Douglas owns rental property that he bought several years ago for $250,000. He has taken depreciation on the house in the amount
Ket [755]

Answer:

Gain= $63,000

Explanation:

<u>First, we need to calculate the book value:</u>

<u></u>

Book value= purchase price - accumulated depreciation

Book value= 250,000 - 35,000

Book value= 215,000

<u>Now, the gain or loss from the sale:</u>

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Gain= $63,000

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2 years ago
Escambia county bonds worth $1,000 are selling at 109.443. what is the market price of one such bond?
Basile [38]
D. 1094.43 is correct!! 
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2 years ago
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