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fgiga [73]
2 years ago
7

The risk-free rate is 3%. MCD currently prices at $25. The Delta of a 1-year at-the-money European call on MCD is 0.5. John has

a portfolio made of the following: (1) One bond maturing in 1 year paying $1000. (2) Three 1-year at-the-money European MCD calls. (3) Two 1-year at-the-money European MCD puts. How many shares of MCD should John long (or short) to make his portfolio delta-neutral
Business
1 answer:
erica [24]2 years ago
5 0

Answer:

Short 1.5 shares

Explanation:

Given data :

Risk free rate = 3%

current price ( market price ) = $25

Delta of  1-year at money European call on MCD = 0.5

<u>Determine how many shares of MCD John should either Long or short to achieve a delta-neutral </u>

use the relation below

4 * 0.5  + 1 ( 0.5 - 1 )  + x = 0

x ( number of shares ) =  - [ 4 * 0.5  + 1 ( 0.5 - 1 ) ]

                                     = - 1.5 shares

negative ( - ) means MCD should short 1.5 shares

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Home Parties is paying an annual dividend of $1.78 every other year. The last dividend was paid last year. The firm will continu
yuradex [85]

Answer:

Home Parties is paying an annual dividend of $1.78 every other year. The last dividend was paid last year. The firm will continue this policy until two more dividend payments have been paid. Three years after the last normal dividend payment, the company plans to pay a final liquidating dividend of $32 per share. What is the current market value of this stock if the required return is 14.7 percent?

The current market value of this stock = $16.78.

Explanation:

Current market value of this stock = $1.78/1.147 + $1.78/1 .147∧3+ $32/1.147∧6

Current market value of this stock= 1.55187 + 1.78/1.509 + 132/2.27709

Current market value of this stock= 1.55187 + 1.17959 +  14.053

The current market value of this stock = $16.78.

8 0
3 years ago
The goal in marketing is to ____.
vaieri [72.5K]
The answer you are looking for is C. meet the needs and wants of the customer.
6 0
3 years ago
Personnel at a decision point in their careers can receive an overview of their veteran's benefits from what source?
Ratling [72]

The correct answer is; Transition Goals Plans Success Program.

Further Explanation:

The Transition Goals Plans Success Program is a resource that helps military members and their families prepare for life outside of the military. Men and women from all armed services departments are eligible to use this program to help the transitioning to a civilian citizen go smoothly.

The Transition Goals Plans Success Program starts as soon as someone enters the military and each milestone in their career. A few things that the program helps with are;

  • resume writing
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The Transition Goals Plans Success Program now has an app that families can download and have more access to resources.

Learn more about military personnel at brainly.com/question/7223998

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3 0
3 years ago
A situation in which both unemployment and inflation rates are high is known as ______.
faust18 [17]

Stagflation is a condition in which both the unemployment rate and the inflation rate are high. Stagflation is characterised by slower economic development, low employment rates, and increased inflation rates. Stagflation is the occurrence of low economic growth, high unemployment.

In terms of economics, stagflation, sometimes known as recession-inflation, is a state in which unemployment is consistently high, the economy is growing slowly, and the inflation rate is high or rising. When inflation and economic stagnation coexist, this is known as stagflation. The economy is in a state of stagnation due to rising unemployment.

The term "stagflation" was first used in the 1970s, a period of both high inflation and rising unemployment. Stagflation wasn't commonly acknowledged until the middle of the 20th century.

To know more about stagflation, click here:-

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7 0
7 months ago
Which of the following behavior patterns may be a characteristic of minors
Schach [20]

Answer:

Self conscious about appearance

Explanation:

A minor is a usually adopted as term used to make distinction between an adult who can take up legal responsibilities and a child who legally below the specified age of the majority or adulthood. Distinction between minors and adulthood is usually based on the age of the individual. Person below the age of 18 in most countries are considered as minor. They possess certain characteristics which may include excessive consciousness about looks and trying to avoid eyes contact as much as possible.

7 0
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