The reduction in transactions costs per dollar of investment as the size of transactions increases is

You bought four put options (each on 100 shares) on EZ stock with an exercise price of $35 per share and an option price of $1.3

Stella [2.4K]

Answer:

-$ 540

Explanation:

Put Option - provides right to sell share at exercise price on expiry.

As it is an Right not Obligation, Thus, buyer will exercise the right only if he is gaining at expiry and he will gain only if exercise price is higher than spot price at expiry

In this case Exercise Price ($ 35) is lower than the spot price ( $ 36.25) at expiry. Thus he will not execrise the option.

He will lose all what he spend in buying option that is $ 1.35 per share

Thus,

Net profit or loss on this investment = 4 Options * 100 Shares each * Loss of $ 1.35 per Share

Net profit or loss on this investment = 4 * 100 * (-1.35)

Net profit or loss on this investment = -$ 540

4 0

3 years ago

A and B have a written contract whereby A agrees to sell B a plot of land for $100,000. Later, without terminating the first con

AnnZ [28]

Answer:

B) Is not a contract because there is no consideration for B's promise.

Explanation:

In contract law, consideration is the benefit that must be bargained for between the parties involved. It is the essential reason for the parties entering a contact. Consideration must have some value and is exchanged on the performance or promise from the other party.

Common law rules on contract modifications require some new consideration in order to modify an existing contract. In this case, only B added some new consideration (more money) to the written contract, A didn't add anything new.

3 0

3 years ago

Steve and Ed are cousins who both turned 25 today. Their grandfather began putting $2,500 per year into a trust fund for Steve o

iVinArrow [24]

Answer:

Answer A is correct

Explanation:

Step 1 find how much Steve will have when he retires:

financial calculator steps

press g 7 (to set the calculator to assume payments are made at the beginning of the period)

8 i (interest earned)

46 n (periods remaining)

-2500 pmt (payment made into the account each period)

0 PV (starting balance of account)

solve for FV

FV = $1,129,750.38

We can now use this value to solve backwards

8 i

41 n (only 41 more payments here)

0 PV (starting balance)

1,129,750.38 FV (ending value)

solve for pmt

pmt = 3,725.55 ~ 3,726 so answer A

6 0

3 years ago

If the European subsidiary of a U.S. firm has net exposed assets of 750,000 Euros, and the euro drops in value from $1.30/euro t

Natalija [7]

The correct answer is:

b. loss of $75,000

6 0

2 years ago

A rectangular floor measures $a$ feet by $b$ feet, where $a$ and $b$ are positive integers with $b > a$. An artist paints a r

DENIUS [597]

The number of possibilities that are there for the ordered pair is 2.

<h3>Calculation and Parameters
</h3>

Because the unpainted part of the floor covers 1/2 of the area, then the painted rectangle covers 1/2 of the area as well.

Given that the border width is 1 foot, the dimensions of the rectangle are a-2 by b-2.

Making an equation:

ab= 2((a-2)(b-2))

ab= 2ab-4a-4b+8

ab-4a-4b+8=0

If we apply Simon's Favorite Factoring Trick,

ab-4a-4b+16= 8

(a-4)(b-4)= 8

Since b > a, then we have the possibilities

(a-4) = 1 and (b-4) = 8, or (a-4) = 2 and (b-4) = 4.

(5, 12) or (6,8) which gives us 2 possibilities.