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kherson [118]
3 years ago
11

A put option that expires in six months with an exercise price of $45 sells for $2.34. The stock is currently priced at $48, and

the risk-free rate is 3.5 percent per year, compounded continuously. What is the price of a call option with the same exercise price
Business
1 answer:
Degger [83]3 years ago
6 0

Answer: $6.12

Explanation:

The price of a call option with the same exercise price will be calculated thus:

According to Put-Call Parity, it should be noted that the Call Price will be:

= Put Price + Stock Price - [Exercise Price × e ^-(r × t)]

= $2.34 + $48 - [$45 × e ^ -[0.035 * (6/12)]]

= $50.34 - [$45 × 0.9827]

= $50.34 - $44.22

= $6.12

Therefore, the price is $6.12

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A company that is based on a direct flow of authority from the top executive to subordinates is known as a ________ organization
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Truzan Creations, one of the leading names in the handicraft industry, recently launched a new artifact in the market. The compa
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Answer:

A) Forecasting models

Explanation:

Forecasting models -

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Proponents of a fixed exchange rate system point out that a major drawback of a floating exchange rate is that it is responsible
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Proponents of a fixed exchange rate system point out that a major drawback of a floating exchange rate is that it <u>C. leads to uncertainty</u> about the value of goods traded internationally.

<h3>What is a floating exchange rate?</h3>

A floating exchange rate refers to the foreign exchange rate as determined by the forex market based on supply and demand relative to other currencies.

A floating exchange rate system gives the government more scope to use monetary and fiscal policies to achieve domestic economic stability, unlike a fixed exchange rate regime.

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2 years ago
At any given hotel, one of the largest departments is housekeeping.
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True

Explanation:

3 0
2 years ago
Read 2 more answers
What is the yield to maturity (ytm) on a simple loan for $2000 that requires a repayment of $8000 in five years' time?
babunello [35]

The yield to maturity (YTM) on a simple loan is 31.9%

<h3>What is the yield to maturity?</h3>

The yield to maturity represents an overall total of all outstanding loan repayments. The yield to maturity of the security varies based on the bond's valuation and the number of remaining balances.

simple loan for $2,000

repayment of $8,000

time period 5 years

The formula for yield to maturity is

Yield to Maturity = [Annual Interest + {(FV-Price)/Maturity}] / [(FV+Price)/2]

$2,000 = $8,000/(1+i)⁵

(1+i)⁵ = $8,000/$2,000

(1+i) = 41/5

i = 1.319-1

= 31.9

31.9% is the YTM

The yield to maturity (YTM) on a simple loan is 31.9%

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2 years ago
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