Help me please!! Find the value of x
1 answer:
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I redrew the triangle (just turned it around it make it easier to understand).
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) </u></h3>
$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.
The slope of the line that passes through (5,−10) and ( 11 , − 12 ), in simplest form is: -1/3
<em><u>Recall:</u></em>
- The slope of a line passing across through two points can be calculated using:
<em><u>Given two points:</u></em>
(5,−10) and ( 11 , − 12 )
- Let,
- Substitute
Slope (m) = -2/6
Slope (m) = -1/3
Therefore the slope of the line that passes through (5,−10) and ( 11 , − 12 ), in simplest form is: -1/3
Learn more about slope of a line on: