Answer:
Step-by-step explanation:
An option to buy a stock is priced at $150. If the stock closes above 30 next Thursday, the option will be worth $1000. If it closes below 20, the option will be worth nothing, and if it closes between 20 and 30, the option will be worth $200. A trader thinks there is a 50% chance that the stock will close in the 20-30 range, a 20% chance that it will close above 30, and a 30% chance that it will fall below 20.
a) Let X represent the price of the option
<h3><u> x P(X=x)
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$1000 20/100 = 0.2
$200 50/100 = 0.5
$0 30/100 = 0.3
b) Expected option price
Therefore expected gain = $300 - $150 = $150
c) The trader should buy the stock. Since there is an positive expected gain($150) in trading that stock option.
Y=x+4
3x+Y=-8
3x+x+4=-8
X=-3. Substitute the value of x
Y=-3+4
Y=1
(X,Y)= (-3,1)
So the answer is C
Answer:
725.7
Step-by-step explanation:
you multiply 682.98 x 6.25% and get 42.68625
then you add 682.98 + 42.68625 and get 725.66625
then you have to round to the nearest hundredth and get 725.7.
Answer: One plain roll is 4 dollars and one shiny roll is 6 dollars.
Step-by-step explanation:
lets start by saying
rolls of plain wrapping paper = x
rolls of shiny wrapping paper = y
Kathryn sold 4 plain rolls and 3 shiny rolls for 34 dollars.
4x+3y=34
Eugene sold 4 plain rolls and 2 shiny rolls for 28 dollars
4x+2y=28
Both equations will look like this.
4x+3y=34
-1(4x+2y)=(28)-1
we can multiply the second equation by -1 to get y alone. (doesn't matter which equation). Once you do that, the positive 4x and the negative 4x cancel out, 3y-2y=1y and 34-28=6. you are left with
1y=6 so one shiny roll is 6 dollars.
now use that price to find the cost of the plain roll.
lets use Kathryn's equation
4x + 3(6)=34
4x + 18= 34
-18 -18
4x=16. Divide by 4 to find cost of one plain roll.
16÷4=4. One plain roll costs 4 dollars.
Lets check. Using Kathryn's equation,
4(4) + 3(6)=34
16+18=34
34=34. We are right.
