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
diamong [38]
2 years ago
13

. The market price of Northern Mills stock has been relatively volatile and you think this volatility will continue for a couple

more months. Thus, you decide to purchase a two-month European call option on this stock with a strike price of $30 and an option price of $1.60. You also purchase a two-month European put option on the stock with a strike price of $30 and an option price of $.20. Contracts are on 100 shares. What will be your net profit or loss on these option positions if the stock price is $36 on the day the options expire? Ignore trading costs and taxes.$600$420$210$270$400
Business
1 answer:
choli [55]2 years ago
3 0

Answer:

$420

Explanation:

The computation of the net profit or loss is shown below:

Before that we have to determine the following calculations

Net Profit from call option is

= (Gain from Exercising Call Option - Option Premium paid) × Size of the Contract

= (($36 - $30) - $1.60) × 100 Shares

= $440

Net Loss from put option is

= (Option Premium paid) × Size of the Contract

= $0.20 × 100 Share

= $20

So, the net profit is  

= Net Profit from Call Option - Net loss from Put Option

= $440 - $20

= $420

You might be interested in
The internal financial statements of Vera Incorporated show that their beaded purses incurred an operating loss in the most rece
brilliants [131]

Answer:

Vera Incorporated

Change in annual operating income from discontinued business:

Annual Operating Income would reduce by $78,000.

Explanation:

a) Calculation of the Net Income Lost:

Loss of Contribution        ($99,000)

Avoidable fixed cost          $21,000

Reduction of Income       ($78,000)

b) The line of purses contributes $80,000 towards the company's fixed cost.  Therefore, discontinuing this line of business would lead to the loss of this steam of income.  The amount of reduced operating income will be $78,000 ($80,000 - 2,000).

4 0
3 years ago
According to the Federal Housing Finance Board, the mean price of a single-family home two years ago was $299,500. A real estate
Tems11 [23]

Answer: A.There is sufficient evidence to conclude that the mean price of a single-family home has increased from its level two years ago of $299,500

Explanation:

From the question, we are informed that according to the Federal Housing Finance Board, the mean price of a single-family home two years ago was $299,500 and that a real estate broker believes that due to recent credit crunch, the mean price has increased since then and the result is that the null hypothesis is not rejected.

The conclusion based on the results of the test is that since the null hypothesis has been rejected, it simply means that there are sufficient evidence that there has been an increase in the mean price since two years ago.

Therefore, option A is the correct answer.

3 0
3 years ago
Dr. regan was hired by the siri company to assist them with retaining their employees without lowering profits and expectations.
Anestetic [448]
Dr. Regan was hired to help retain employees by the Siri corporation without losing money and expectations. He was the one who suggested that employees could decorate their work spaces and this would help employees feel more comfortable where they have to work 8 or more hours per day. This then helped the company by people not calling in and less people quit their jobs. Dr. Regan was most likely an industrial and organizational psychologist. Many companies hires these types of psychologists to help their employees with stress at work and to put employees at ease. 
7 0
2 years ago
A stock paid $2.64 in dividends at the end of last year and is expected to pay a cash dividend
Sindrei [870]

Answer:

$117.26

Explanation:

Easy.

4 0
2 years ago
Read 2 more answers
logan asks his friends, family, teachers and coaches if they know anybody who can tell him more about a career in which he is in
kondor19780726 [428]
Well,  it matters what career he wants.  If it involves his family friends and coach,  them he  should ask them.
7 0
2 years ago
Read 2 more answers
Other questions:
  • Entrepreneurship is: A. managing businesses for others.B. a controlling interest in the ownership of a corporation.C. managing b
    14·1 answer
  • What can be concluded if the number of movie tickets sold increases by 10 percent when the price is cut by 20 percent, other thi
    7·1 answer
  • A candy store sells boxes of candy containing caramels and cremes. Each box sells for $12.50 and hold 30 pieces of candy (all pi
    13·1 answer
  • If a government wants to pursue an expansionary fiscal policy, then a tax cut of a certain size will be more expansionary the: 

    13·1 answer
  • Umatilla Bank and Trust is considering giving Pronghorn Corp a loan. Before doing so, it decides that further discussions with P
    13·1 answer
  • A profit-maximizing entrepreneur rents an apple orchard for a day. He is a price taker in both the market for labor and the mark
    8·1 answer
  • The economic survey 2018 suggest that the psychological biases
    10·1 answer
  • if 2022 murano’s available intelligent climate control starts in automatic defrost mode, what other features, if equipped, are a
    9·1 answer
  • Overnight trucking recently purchased a new truck costing $150,800. The firm financed this purchase at 8. 6 percent interest wit
    9·1 answer
  • From the consumer’s perspective, the elements of an imc strategy can be viewed as being either.
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!