Answer:
Two ways: using VIX futures and traded notes or S&P 500 options and neutral investment strategies.
Explanation:
Volatility is a market's tendency to rise or fall sharply within short periods of time. It is usually measured using standard deviation or return on investment. There are several ways to handle market volatility. One is to use exchange-traded instruments, such as VIX future contracts and exchange traded notes. VIX provides real time estimations of greed and fear levels, as well as volatility expectations in the next 30 sessions. The other way is to use S&P 500 options and delta-neural strategies.
Answer: False
Explanation:
A startup firm is a company that is in the first stage of its operations. These firms are often initially bankrolled by their entrepreneurial founders as they make effort as they take chance on developing a product or service for which they believe there is a demand.
Answer:
Explanation:
1. NPV = -1,700,000 + 2,055,000 * (1-0.008) / 1.02
= $298,588.24
2. Yes order should be fulfilled
3. Break-even probability = 1 - 1,700,000 * 1.02 /2,055,000
= 1 - 0.843795
15.62%
Answer:
B. The process of allocating the cost of tangible assets to expense in a systematic and rational manner to those periods expected to benefit from the use of the asset.
Explanation:
A piece of equipment will cost a lot of money, but should also last for a long time. Accounting depreciation breaks the cost of the equipment (or any asset) into predictable, mathematically determined amounts so that the costs can be "spread out" over the many years that you use it rather than just when you first purchase it.
Answer:
The price of put option is $2.51
Explanation:
The relation between the European Put option and Call option is called the Put-Call parity. Put-Call parity will be employed to solve the question
According to Put-Call parity, P = c - Sо + Ke^(-n) + D. Where P=Put Option price, C=Value of one European call option share. Sо = Underlying stock price, D=Dividend, r=risk free rate, t = maturity period
Value of one European call option share = $2
Underlying stock price = $29
Dividend = $0.50
Risk free rate = 10%
Maturity period = 6 month & 2 month, 5 month when expecting dividend
P = c - Sо + Ke^(-n) + D
P = $2 - $29 + [$30 * e^[-0.10*(6/12)] + [$0.50*e^(-0.10*(2/12) + $0.50*e^(-0.10*(5/12)]
P = $2 - $29+($30*0.951229) + ($0.50*0.983471 + $0.50*0.959189)
P = -$27 + $28.5369 + $0.4917 + $0.4796
P = $2.5082
P = $2.51
Therefore, the price of put option is $2.51
