Answer:
a. Profit to an investor who buys call for $4
a. $ -4
b. $ -4
c. $ -4
d. $ 1
e. $ 6
b. Profit to an investor who buys call for $6.5
a. $1.5
b. $6.5
c. $ -1.5
d. $ -3.5
e. $ -8.5
Explanation:
The call option is a derivative in which an investor buys an option to buy the asset at a certain price. The value of the call option is determined by maturity. The buyer of call option can buy an asset at a strike price before expiration date.
If the investor buys the call option for $4 then the $4 is an expense for the investor. The value of call will be -4 unless the stock price is above $50.
If the investor buys the call option for $6.5 then the $6.5 is an expense for the investor. The value of call will be -6.5 unless the stock price is below $50.
Answer:
$7.5
Greater
Explanation:
Price elasticity of demand = percentage change in quantity demanded/ percentage change in price
0.2 = 10%/ percentage change in price
percentage change in quantity demanded = 50% = 0.5
0.5 = (New price - $5) / $5
New price = (5 × 0.5) + 5 = $7.5
In the short run, demand is relatively inelastic because consumers need time to find suitable substitutes but in the long run, demand is usually more elastic.
I hope my answer helps you
Answer:
Either the price level or real GDP must increase
Explanation:
Gross Domestic Product (GDP) is used to measure the economic growth, purchasing power, and overall economic health of a country. nominal Gross Domestic Product, measures the value of all final goods and services produced within a country’s borders at current market prices. It takes change in prices and interest rates, inflation and money supply into account when calculating a country’s gross domestic product. Real GDP takes nominal GDP and adjusts for inflation or deflation by comparing and converting prices to a base year’s prices. For nominal GDP to rise there must be increase on either the price level or real GDP.
The expected value for the number of cars with defects can
be obtained by multiplying the probability of success (i.e. the percentage of
products with defects - 40%) by the number of cases (i.e. the number of cars
purchased – 5).
40 / 100 X 5 = 2
Therefore, the expected value for the number of cars with
defects will be the percentage of products with defects is 2
