Answer:
1. What will be the value of your portfolio in January (net of the proceeds from the options) if the stock price ends up at:
(a) $30 ⇒ $170,000
(b) $40 ⇒ $195,000
(c) $50 ⇒ $220,000
call strike price $45
call premium received $2
put strike price $35
put premium paid $3
you pay $2 - $3 = -$1
stock price
$30 $40 $50
stock value $30 $40 $50
put value $5 - -
call value - - -$5
premium paid -$1 -$1 -$1
net stock value $34 $39 $44
total # of stocks 5,000 5,000 5,000
portfolio's value $170,000 $195,000 $220,000
2. Compare these proceeds to what you would realize if you simply continued to hold the shares.
if you hold the stocks:
(a) $30 ⇒ $150,000 - $170,000 = -$20,000 (you gain by using a collar)
(b) $40 ⇒ $200,000 - $195,000 = $5,000 (you lose by using a collar)
(c) $50 ⇒ $250,000 - $220,000 = $30,000 (you lose by using a collar)
Answer:
No
Explanation:
It is mentioned in the question that the boss who is a big supporter of the president fired Jason, who works as a waiter in the restaurant
So based on the given situation, the first amendment is applied for the government employees as it become the first priority for everyone, not for the private employees
Hence, the answer is no
Answer:
True
Explanation:
As long as the statement holds that ''each company's profit depends on whether Little Kona enters...'' and the response of the existing monopoly to charge a low price to keep its market share; then both little Kona and Big Brew have a dominant strategy in this game.
They both will become a duopoly which implies that there will be two players in the industry and the price of Big Brow will be greatly influenced by the presence of Little Kona. Big Brow could charge as high as $8 if Little Kona is absent but as low as $2 if Little Kona is enters the industry.
Obviously they both have a dominant strategy, considering further that the entrance of Little Kona changes the industry structure from monopoly to duopoly
Answer:
Option (C)
Explanation:
As per the data given in the question,
Price of salt increases by = 25%
Quantity of pepper demanded increases by = 4%
Cross price elasticity = Quantity of demand increases ÷ Price of salt increases
= 4% ÷ 25%
=0.16
Hence Cross-price elasticity of demand between salt and pepper would be positive.
So option (C) is answer
The cross-price elasticity of demand between salt and pepper determines whether they are substitutes or complements. If the cross-price elasticity is zero, they are substitutes. If it is negative, they are complements.
In this scenario, the cross-price elasticity of demand between salt and pepper is zero, indicating that they are not related complements. If salt and pepper were complements, the cross-price elasticity of demand between them would be negative. This means that as the price of one product increases, the quantity demanded of the other product would decrease.
#SPJ3
Answer:
After 25 years you will have in your account $42,782.05.
Explanation:
First find the Future value of $19000 invested today at the end of 11 years.
PV = - $19,000
Pmt = $0
P/yr = 1
r = 3.30%
n = 11
FV = ?
Using a Financial calculator, the Future Value (FV) after 11 years will be $27,155.46.
Use the $27,155.46 to find future value at the end of the next 14 years at the rate of 2.70%
PV = - $27,155.46
Pmt = $0
P/yr = 1
r = 3.30%
n = 14
FV = ?
Using a Financial calculator, the Future Value (FV) after 14 years will be $42,782.05.
Thus, after 25 years you will have in your account $42,782.05.
Answer:
False
Explanation:
Agency cost is a term used in Administration to describe a special type of expense that arises from conflicts of interest existing in an organization.Within the context of financial management, the main agency conflicts are:
-Between shareholders and managers :Theory of the principal — agent or the problem of the principal — agent is a theoretical model of economics designed to understand management situations between unequal actors having different degrees of awareness (asymmetric information): the person giving the order (principal) is usually located in the highest hierarchical position and awaits the solution of the task in his interests; on the other hand, the person executing the order (agent: manager or economic agent) is in the lower hierarchical position, but has more information than the principal and can use this information either in the interests of the principal or in his own interests. To solve this problem, various strategies are proposed, such as trusting relationships, general information systems, or focused incentives.
In general, to alleviate agency conflicts, shareholders bear the agency cost, which includes all the relative costs to make the interests of the managers aim to meet their own interests, which is to maximize the share price from the company. However sometimes the shareholders may want management to run the company in a fashion which increases shareholder value.
- Among shareholders and creditors.
Answer:
The answer is false.
Explanation:
Agency costs involve costs that are incurred from managers pursuing their own interests at the expense of shareholder value, AND ALSO
the costs that are incurred by shareholders to make sure that managers pursue shareholder value.
Examples of agency cost on the part of managers are pursuing policies that will increase their remuneration, buying expensive status car and sometimes manipulating financial statements to make it look good to the shareholders and the public.
An example of agency cost on the part of shareholders is hiring external auditor to check the financial statement and make an opinion on its true and fairness.
Answer:
a. advocate redistributing income from David to Rita.
Explanation:
Since David is getting a lower utility from his last dollar obtained (6) than Rita (10), the benefit that David gains from this last dollar is less than what Rita would gain if she was the one receiving this dollar. Therefore, those who favor an equal distribution of income would advocate redistributing income from David to Rita, since total utility would increase with this redistribution.