1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
kari74 [83]
3 years ago
5

WT Foods stock is selling for $38 a share. The 6-month $40 call on this stock is selling for $2.01 while the 6-month $40 put is

priced at $3.60. What is the continuously compounded risk-free rate of return?

Business
1 answer:
Daniel [21]3 years ago
7 0

Answer:

2.1%

Explanation:

The computation of continuously compounded risk-free rate of return is shown below:-

Continuously compounded risk-free rate of return = -In(number)

= -ln((38 + 3.60 - 2.01) ÷ 40) ÷ (6 ÷ 12)

= 0.020605786

or

= 2.1%

For a better explanation, kindly find the spreadsheet as attached.

Hence we have applied the above formula to reach the continuously compounded risk-free rate of return.

You might be interested in
Although appealing to more refined tastes, art as a collectible has not always performed so profitably. Assume that in 2015, an
xenn [34]

Answer:

-3.41%

Explanation:

The computation of the annual rate of return is shown below;

We use the formula:

Future value = Present value × (1 + rate of interest)^number of years  

$10,710,500 = $12,738,500 × (1 + rate of interest)^5

($10,710,500 ÷ $12,738,500)^(1 ÷ 5) = (1 + rate of interest)

(1 + rate of interest) = 0.965913622

r = (0.965913622 - 1) × 100

= -3.41%

3 0
3 years ago
With good internal​ controls, the person who handles cash can also
Nitella [24]

Answer: None of the above.

Explanation:

The correct answer will be "None of the above." The person who handles cash cannot issue credits to customers on sales returns. This could be because their job function does not include this process.

The person also may not account for cash receipts to customers. They can also not account for cash purposes. This could also be because these processes are not included in the persons job function or duties.

Each job function has a clear set of duties that one can perform. Each business has different jobs for people and this particular one does not allow for the person handling cash to do anything else.

3 0
4 years ago
El Niño wind patterns affected the weather across the United States during the winter of 1997–1998. Suppose the demand for home
Fed [463]

Answer:

The price elasticity of demand for home heating oil is-0.36

Explanation:

In order to calculate the price elasticity of demand for home heating oil we would have to use the following formula:

Elasticity of demand = (dQ/dPhho)*(P/Q)

According to the given data we have the following:

demand for home heating oil in Connecticut=Q = 20 – 2 Phho + 0.5 Png – TEMP

current price of home heating oil=$1.20

current price of natural gas =$2.0

Therefore, if Q = 20 – 2 Phho + 0.5 Png – TEMP, then:

Q=20 – 2*1.2 + .5*2 – 12

Q=6.6

Therefore, price elasticity of demand = (-2)*(1.2/6.6)

price elasticity of demand =-0.36

The price elasticity of demand for home heating oil is-0.36

5 0
3 years ago
How can you use your knowledge to enhance your leadership skills?
S_A_V [24]

Answer:

Have a growth mindset, practice discipline, learn to follow other, set situational awareness

3 0
4 years ago
Find the missing angle​
Lady bird [3.3K]

Answer:

<h2>To find the missing angle: Label each angle in the triangle with a letter. The unknown letter will be to the left of the =. In the image above, A is the unknown angle. Choose the equation with A to the left of the =. Insert the values of the known letters into the right hand side of the equation.</h2>

Explanation:

I hope this helps

8 0
3 years ago
Other questions:
  • Why do pre-construction and design specialists typically take an interdisciplinary approach to their work?
    14·1 answer
  • Kelly's kitchen, a popular chain of fast food restaurants, offers a kids' meal pack free with every purchase of its newly introd
    11·1 answer
  • If you made a 17% profit on the $76,000 sale of a lot, how much did you pay for the lot?
    14·1 answer
  • Palmetto regional hospital has designed an upcoming research project for determining the best methods for improving patient care
    8·1 answer
  • Economists often are interested in percentage change from one period to the next. The percentage rate of change of gross domesti
    7·1 answer
  • A firm that specializes in buying other firms accounts receivable is called a(n) _____.
    9·1 answer
  • At a movie theater box office, all tickets are sequentially prenumbered. At the end of each day, the beginning ticket number is
    6·2 answers
  • Prior to setting pricing options for its products to maximize profit, a company must: a. determine whether it should use horizon
    12·1 answer
  • The steeper an isoquant is ​(labor measured on the horizontal axis​): A. the greater is the level of output. B. the greater is t
    13·2 answers
  • Alto Corporation sold two capital assets this year. The first sale resulted in a $13,000 capital gain, and the second sale resul
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!