A stock is currently selling for $79 per share. A call option with an exercise price of $83 sells for $3.95 and expires in three months. If the risk-free rate of interest is 2.8 percent per year, compounded continuously, what is the price of a put option with the same exercise price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Answers

Answer 1

Answer: $7.37

Explanation:

The price of a put option with the same exercise price would be calculated as:

C + Xe^-rt = P + S

It should be noted that in the formula above,

P = Put option price

C = price of call option

S = stock price

X = exercise price

r = interest rate

t = time

We then slot in the values which will be:

= 3.95 + 83e^-2.8% × 3/12 = P + 79

P = 3.95 + 83e^-2.8% × 3/12 - 79

P = 3.95 + 82.42 -79

= $7.37


Related Questions

Alicia studies with her phone nearby so she can play her favorite music and keep up with what her friends are doing.

In this case, how can Alicia make her studying environment more effective?

She can find a more comfortable chair.
She can have more resources available.
She can remove any possible distractions.
She can choose an area with more light.

Answers

Answer:

C

Explanation:

edgen 2020

In this case, Alicia makes her studying environment more effective as she can remove any possible distractions. The correct option is c.

What is studying?

Studying is crucial for personal skill development in addition to educational advancement. Your confidence, skill, and self-esteem can all be increased by having effective study techniques. Additionally, it aids in lowering tension and worry related to tests and deadlines.

Take anything out of your study area that is not necessary for studying. To lessen auditory distractions, wear noise-canceling headphones, listen to white noise, or try utilizing earplugs. Eliminate electronic irritants. Put your phone in silent mode and away from your line of sight.

Therefore, the correct option is c. She can remove any possible distractions.

To learn more about studying, refer to the link:

https://brainly.com/question/17096654

#SPJ6

Distinguish between the Federal funds rate and the prime interest rate. Which of these two rates does the Fed explicitly target in undertaking its monetary policy?

Answers

Answer: The Fed wanted to encourage banks to raise their prime interest rates, slowinggrowth in investment, consumption, and aggregate demand to a noninflationary pace.

Explanation:

Federal funds interest rate could be as interest rate banks charge themselves on overnight loans in order to meet reserve requirement. While prime interest are interest rates banks charge on loans to their most credit worthy customer. The Fed wanted to encourage banks to raise their prime interest rates, slowinggrowth in investment, consumption, and aggregate demand to a noninflationary pace.The tight money policy successfully raised the prime interest rate.

Which of the following is a potential disadvantage when considering long-term loans as an option for raising capital?
OA. They are available to firms with a weak credit rating.
O B. Not all companies can qualify for loans and acceptable terms.
O C. Such loans can restrict the way an organization uses its assets.
D. They require diluting ownership in organizations.
O E. They cannot provide substantial sums of money to businesses.

Answers

Answer:

A potential disadvantage when considering long-term loans as an option for raising capital is:

D. They require diluting ownership in organizations.

Explanation:

This potential disadvantage becomes a reality when the long-term loans are converted into shares.  At this point, the ownership in the organization is diluted.  Ownership dilution reduces the percentage of the ownership of shares in the entity.  The investment becomes less attractive to the original owners since more owners are brought on board.

A potential disadvantage when considering long-term loans as an option for raising capital is D. They require diluting ownership in organizations.

A long-term loan refers to a loan that is paid for more than three years. This is different from a short-term loan that is usually expected to be paid back within a few years.

A disadvantage when considering long-term loans as an option for raising capital is that require diluting ownership in organizations. When one doesn't pay back on time, one may lose some percentage of ownership in the company.

Read related link on:

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The most competitively effective and very likely most profitable long-term approach to reduce or eliminate the impact of paying tariffs on pairs imported to a company's distribution warehouse in Europe-Africa is to:___________.
A) raise the selling prices of all footwear being marketed in Europe-Africa by enough to cover somelall of the tariff costs. build and equip a production facility in Europe-Africa and then expand it as may be needed to supply all (or at least most) of the pairs the company intends to try to sell in Europe- Africa.
B) cut distribution and warehouse expenses and marketing expenses per pair sold in Europe Africa by enough to cover some/all of the tariff costs.
C) pursue a strategy of selling fewer pairs in Europe-Africa than rival companies, which will then keep the company's costs for import tariffs in Europe-Africa lower than those of rivals and give the company a competitive advantage based on low tariff costs on its sales in Europe-Africa.
D) pursue a strategy of selling footwear to retailers in Europe-Africa at a wholesale price of $39 per pair or less--no import tariffs have to be paid on branded pairs shipped to footwear retailers in Europe-Africa when the wholesale price is below $40 per pair.

Answers

Answer:

build and equip a production facility in Europe-Africa and then expand it as may be needed to supply all (or at least most) of the pairs the company intends to try to sell in Europe- Africa

Explanation:

In order to have effective competition and profitable for the long term approach for decreasing or removing the effect of tariff that would be paid on pairs is that to establish the production facility so that it would get expanded and the same is to be sell in Europe-Africa

Therefore the above represents the answer

The most appealing way to reduce or eliminate the impact of paying tariffs on pairs imported to a company's or organization's distribution warehouse in Europe-Africa is to:

Build and equip a manufacturing plant in Europe-Africa, then expand it as needed to supply all (or at least the majority) of the pairs the company plans to sell in Europe-Africa.

To have effective competition and a successful long-term strategy for reducing or eliminating the effect of tariffs paid on pairs, it is necessary to develop a production facility that can be expanded and sold in Europe.

Therefore, option A is the correct response to the distribution warehouse.

For more information regarding the Europe-Africa distribution:

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The most important part about having an effective organizational culture is to:
a. ensure that all your values are expressed clearly in the mission statement.
b. reinforce the values in employees through cards, pins and desk sets.
c. include the values in employee on-boarding sessions.
d. ensure that words are aligned with behaviors.

Answers

Answer:

d. ensure that words are aligned with behaviors.

Explanation:

Of course,  we can argue that it is not all about expressing clearly the organization's culture in the mission statement or writing them on cards, pins, desk sets, etc which may not even make any difference among employees, neither is simply including the values in the employee recruitment process.

However, what really matters is that the organization ensures all the words about the organization's culture on paper are aligned with the behaviors of employees as they carry out their assignments.

For example, an organization that merely writes on paper that it doesn't tolerate discrimination in the workplace on the basis of race, gender, etc, and yet still allows open discriminatory practices has failed to align words with behavior.

An aging of a company's accounts receivable indicates that $8400 are estimated to be uncollectible. If Allowance for Doubtful Accounts has a $3800 credit balance, the adjustment to record bad debts for the period will require a:_____.
1. debit to Bad Debts Expense for $1,800.
2. debit to Bad Debt Expense for $2,200.
3. credit to Allowance for Doubtful Accounts for $3,000.
4. debit to Bad Debts Expense for $2,000.

Answers

Answer:

Debit to Bad Debts Expense for $4,600

Explanation:

Based on the information given we were told that the company's accounts receivable shows the amount of $8400 which was estimated to be uncollectible which means that If Allowance for Doubtful Accounts has the amount of $3800 as credit balance, the adjustment to record bad debts for the period will require a Debit to Bad Debts Expense for $4,600 calculated as

Bad Debts Expense=Accounts receivable-Allowance for Doubtful Accounts

Bad Debts Expense=$8,400-$3,800

Bad Debts Expense=$4,600

Imagine you are in the process of buying a new car. Give at least two examples of both qualitative and quantitative data that you would consider in your purchase decision. Explain and defend your choices provide several qualitative attributes and several quantitative characteristics you would consider important when purchasing a car.

Answers

Answer: Qualitative data cannot be recorded numerically at the initial stage, but can be later converted into numerical data for statistical purposes.

Quantitative data is conclusive in summary, can be recorded numerically first hand.

Explanation:

Qualitative data cannot be recorded numerically at the initial stage, but can be later converted into numerical data for statistical purposes.

Quantitative data is conclusive in summary, can be recorded numerically first hand.

Qualitative variables examples;

Colour of the car

Driver experience

Quantitative variables:

Size of the car

Horse power of the engine -

Short Company purchased land by paying $22,000 cash on the purchase date and agreed to pay $22,000 for each of the next seven years beginning one-year from the purchase date. Short's incremental borrowing rate is 10%. On the balance sheet as of the purchase date, after the initial $22,000 payment was made, the liability reported is closest to: (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided.)

Answers

Answer:

The liability reported is closest to $107,105.21.

Explanation:

This can be calculated using the formula for calculating the present value of an ordinary annuity as follows:

PV = P * ((1 - (1 / (1 + r))^n) / r) …………………………………. (1)

Where;

PV = Present value or the the liability reported  =?

P = Annuity payment = $22,000

r = Student's desired return rate = 10%, or 0.10

n = number of years = 7

Substitute the values into equation (1) to have:

PV = $22,000 * ((1 - (1 / (1 + 0.10))^7) / 0.10)

PV = $22,000 * 4.86841881769293

PV = $107,105.21

Therefore, the liability reported is closest to $107,105.21.

A result of welfare economics is that the equilibrium price of a product is considered to be the best price because it
a. maximizes both the total revenue for firms and the quantity supplied of the product.
b. minimizes costs and maximizes output.
c. maximizes the combined welfare of buyers and sellers .
d. minimizes the level of welfare payments.

Answers

Answer:

c. maximizes the combined welfare of buyers and sellers .

Explanation:

Welfare Economics simply deals with how the sharing/ allocation of resources affects economic well-being of people. The above statement of the fact that the result of welfare economics is that the equilibrium price of a product is considered to be the best price because it maximizes the combined welfare of buyers and sellers is true due to the fact that it takes the welfare and wellbeing of both parties into consideration.

Bonita Company's inventory records show the following data:

Units Unit Cost
Inventory, January 1 10900 $8.00
Purchases: June 18 8700 8.10
November 8 5700 5.00

A physical inventory on December 31 shows 5700 units on hand. Under the FIFO method, the December 31 inventory is:_______

Answers

Answer:

$28,500

Explanation:

FIFO will give the same result whether you use perpetual or periodic system.

Ending Inventory = Units Left × Earliest Price

Therefore,

Ending Inventory = 5700 units × $5.00

                             = $28,500

From 2006 to 2010, per capita real gross domestic product (GDP) in Croatia grew an average of 1.08 percent per year. At that rate, according to the Rule of 70, in roughly how many years will the Croatian economy double in size?

Answers

Answer:

Number of Years to Double= 64.81

Explanation:

Giving the following information:

From 2006 to 2010, per capita real gross domestic product (GDP) in Croatia grew an average of 1.08 percent per year.

The rule of 70 is a means of estimating the number of years it takes for an investment or your money to double. In this case, the GDP.

Number of Years to Double= 70/Annual growth

Number of Years to Double= 70/1.08

Number of Years to Double= 64.81

If Smart Touch Learning increases its production of tabletâ computers, what will be the effects on the variable and fixed costs perâ tablet?

Answers

Answer:

D. variable costs per tablet is constant, fixed costs per tablet decrease

Explanation:

The variable cost is that cost that changes with the output level but would remains the same at per unit. While on the other hand the fixed cost is the cost that remains fixed whether there is an increase or decrease in the output level

Therefore as per the given situation, the variable cost per tablet would remain constant while the fixed cost per table would reduce

hence, the correct option is d.

Magix Productions orders new equipment for the company. The new equipment costs $50,000 and will help the company to save $10,000 annually. What is the average rate of return of the equipment?
A. 15 percent
B. 20 percent
C. 35 percent
D. 40 percent

Answers

Answer:

B. 20 percent

Explanation:

The computation of the average rate of return of the equipment is shown below:

= Average net profit or savings ÷ average investment

= ($10,000 ÷ 2) ÷ ($50,000 ÷ 2)

= $5,000 ÷ $25,000

= 20%

hence, the average rate of return of the equipment is 20%

We simply applied the above formula so that the correct value could come

And, the same is to be considered

An appliance repair shop buys and uses about 4,212 fan motors annually. Holding cost is 27 dollars per motor per year, and ordering cost is 177 dollars per order. Determine the economic order quantity. Round your number to ZERO decimal point.

Answers

Answer:

15,251 units

Explanation:

The formula for Economic order quantity is;

EOQ = √2DS/H

Where,

D = Annual demand = 4,212

S = Ordering cost = $177

H = Holding cost = $27/4,212 = $0.00064102564

EOQ = √ 2 × 4,212 × $177 / $0.00064102564

EOQ = √ $1,491,048 / $0.00064102564

EOQ = √232603488.37

EOQ = 15,251 units

Chik’s Chickens has accounts receivable of $6,333. Sales for the year were $9,800. What is its average collection period? (Use 365 days in a year. Do not round intermediate calculations. Round your final answer to the nearest whole number.)

Answers

Answer:

236 days

Explanation:

Average collection period is computed as;

= Receivables at start of the year / Average daily sales

Given that;

Receivables at start of the year

= $6,333

Daily sales

= Sales for the year / Days in a year

= $9,800 / 365 = 26.849315068

Therefore,

Average collection period = $6,333 / 26.849315068

Average collection period = 235.87193878

Average collection period = 236 days. Approximated.

the answer is 2,3,6 i just don't see why you tell a story

Answers

Answer:

Storys make everything fun.

Explanation:

Smarter than Einstein

Answe to what?or am I just slow??

***ECONOMICS***An investment that you bought for ______
and sold for _____
made a profit.

A. $500; $400

B. $400; $500

C. S500; $300

D. $400; $300

Answers

Answer:

B.

Explanation:

you bought it for 400 and sold it for 500 and made 100$ profit

On December​ 31, 2014​, Renda​'s common stock sold for per share. At that​ price, how much did investors say​ $1 of the​ company's net income was​ worth?

Answers

Question Completion:

On December​ 31, 2014​, Renda​'s common stock sold for $35 per share. At that​ price, how much did investors say​ $1 of the​ company's net income was​ worth? Earnings per share = $1.50

Answer:

Renda Company

The value of $1 of the company's net income by investors was:

$23.33

Explanation:

a) Data and Calculations:

Market price of Renda's common stock = $35 per share

Earnings per share = $1.50

This means that investors' value on $1 = $35/$1.50 = $23.33

b) Investors in Renda's common stock place a value of $23.33 for each $1 of the company's net income.  This is why they can afford to pay $35 per share in order to benefit from $1 of the company's earnings.  This calculation is based on the price-earnings ratio, which relates the company's share price to the earnings per share.

Which characteristics make it so that perfectly competitive firms and monopolistically competitive firms have zero economic profit in the long run?

Answers

Answer:

A.  Homogeneous product and perfect information

Explanation:

The characteristics in which the perfectly competitive market and the monopolistic market would have zero economic profit in the long run that should be the same product and perfect information as the high prices would vary . Also it decreases the asymmetric information

Therefore as per the given situation, the correct option is A

A company's_______ tells you how much money the company has left over after subtracting all expenses. *

a) Net Profit
b) Gross Profit
c) Revenue
d) Cost Of Goods Sold (COGS)​

Answers

Answer:

net profit

Explanation:

net profit is the money left after all cost are deducted

Answer:  

D: COGS

Explanation:  

A company's COGS tells you how much money the company has left over after subtracting all expenses

Discuss how construction of a portfolio can lower the risk of an investor.

Answers

Answer:

Simply put, the other meaning portfolio construction is diversification of risk. Portfolio construction is the one of simplest way of reducing risk without significantly affecting the returns.  

Ways of diversifying risk includes Pension Funds, Mutual Fund, Equity, Stocks, Debt / Bonds, Retirement Saving, etc.  If someone had made their investment in only one asset class, then there will be less returns available with high risk. while doing portfolio investment, it will give a systematic and controlled risky investment with higher return opportunities because some assets will perform well while other do poorly. but next year scenario could be changed or reversed. There are some thumb rules while doing portfolio investment, but it can be changed based on individual's personal goal.

"In terms of the exercise, what price will the client report for tax purposes in relation to the price at which the stock is sold to the buyer of the call?"

Answers

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When is a variance considered to be 'material'?
a) When it could have been controlled more effectively
b) When it is infrequent
c) When it is unfavorable
d) When it is large compared to the actual cost

Answers

ANSWER: D

A variance is considered to be material if it exceeds a certain percentage or dollar amount.

g __________ conversion is the least expensive and highest risk IS conversion strategy because the old system is cut off and the new system is turned on at a certain point in tim

Answers

Answer:

Direct

Explanation:

There are different types of conversion systems. Example includes the direct conversion and parallel conversion.

In this conversion system, users stops using the old system one day and starts using the next system the next.

Its requires fewer resources and is simple if nothing goes wrong. Risk involved mostly if the hardware and software are old or at a cutting edge.

Direct conversion is said to be an abrupt change where the the old system is simply unplugged and the new system is turned on. It does not allow users with any choice but to work with the new system. It is said to be risky and least cost.

Accounting, inventory management, and shipping are part of order fulfillment and referred to as __________ operations.
A) Back-office
B) Customer-facing
C) Front-office
D) Logistics

Answers

Answer: back office

Explanation:

The back office in an organization is simply the part of the organization that is made up of the employees that deals.with administration and also tge support personnel and are typically not required to face the customers or clients like the front office employees.

Some of the back-office functions are IT services, Regulatory compliance, shipping, record maintenance, settlements, accounting, etc.

Driving skills are a basic qualification of

Military Infantry.
Mail Carriers.
Ambassadors.
Tax Examiners.

Answer quick

Answers

Answer: The answer is B mail carriers

Explanation:

Answer: B

Explanation:

Mail carriers

During the 1970s, some economists argued that the cause of the woes of the economy were due to __________. g

Answers

Explanation:

Stagflation. Which is stagnant growth combined with inflation. Which was caused in large part by repeated disruptions to global oil supplies, which led to soaring prices and gasoline shortages in the United States.

A company acquired an office building, land, and equipment in a single basket purchase. The fair values were $1,560,000, $1,560,000, and $2,080,000 for the building, land, and equipment, respectively. The company recorded the building for $1,470,000. What was the total purchase cost for all three assets

Answers

Answer:

$4,900,000

Explanation:

Ratio of Building in total Fair Value = $1,560,000 / ($1,560,000 + $1,560,000 + $2,080,000)

Ratio of Building in total Fair Value = $1,560,000 / $5200000

Ratio of Building in total Fair Value = 0.3

Ratio of Building in total Fair Value = 30%

Building recorded by = $1470000

Total Purchase Price of all three asset = $1470000 / 30%

Total Purchase Price of all three asset = $1470000 / 0.3

Total Purchase Price of all three asset = $4,900,000

What type of mortgage requires fixed monthly interest payments for 3 to 5 years whereupon full payment of the mortgage principal is due?

Answers

Answer:

Balloon Payment Mortgages

Explanation:

Mortgages are simply loans to persons or businesses to get/purchase homes, land, or other real property.

A balloon payment mortgage is a a type of mortgage known for its ability to not fully amortize over the term of the note, thereby leaving a balance due at maturity. Its last or final payment is called a balloon payment because of its notable large size. This type of mortgages are more more common in commercial real estate than in residential real estate. the above statement of it that it require fixed monthly interest payments for 3 to 5 years whereupon full payment of the mortgage principal is due is correct.

A perpetual bond with a par value of $1,000 and a coupon rate of 7.75% has a current market price of $900. What is its yield to maturity

a. 9.32%
b. 8.33%
c. 7.92%
d. 9.45%
e. 8.61%

Answers

Answer: e. 8.61%

Explanation:

This is a perpetual bond so the price is calculable by;

Price = Coupon / Yield to Maturity

Coupon = 7.75% * 1,000

= $77.50

900 = 77.50/ YTM

900 * YTM = 77.50

YTM = 77.50/900

= 8.61%

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Paul is locked out of his house. An 18-ft ladder is outside and an upstairs window is open. Paul read the safety warning on the ladder recommending it be placed six feet away from the wall. He placed the ladder according to the warning and it reached the base of the window. How high is the base of the window off the ground? In 2005, SMS has 632 students enrolled. This year, SMS has 825 studentsenrolled. What is the percent increase of students? * What do most economists believe is the relationship between long run expectations of inflation, actual inflation, and the money supply growth? if you answer crrectly ill give you the crown and pointsThe Aztecs were a Mesoamerican culture that thrived in central Mexico within the post-classic period from 1300 to 1521. The Aztec people groups included diverse ethnic bunches of central Mexico, especially those groups who spoke the Nahuatl language and who ruled huge parts of Mesoamerica from the 14th to the 16th centuries. Aztec culture was organized into city-states, some of which joined to create organizations together, political confederations, or realms. They impacted the nourishment and gastronomy. The Aztecs domesticated crops and raised animals such as the "Mexican hairless" canine and the turkey fowl. They also included in their menu, items such as tortillas, pozole, cocoa and tamales etc.besides that how did inca civilization shape latin american culture which scenarios are examples of artificial selection?A: breeding certain cows for increased milk production B: farmers planting seeds from only most productive cropsC: bacteria becoming more resistant to human antibiotics D: creating a new breed of dog that js hypoallergenic What causes the atrioventricular valves to close during a heartbeat? a Pressure in the atria is higher than in the ventricles. b Pressure in the atria is lower than in the ventricles. c Pressure in the arteries is higher than in the ventricles. d Pressure in the arteries is lower than in the ventricles. (1 point)7. Which of the following advertising techniques shows ads to search engine users who havesearched for a specific product or service?O paid searchesO clickbaitO native advertisingOpixel ads Joe borrowed $8,000 from the bank at a rate of 7% simple interest per year. How much interest did he pay in 4 years? The process in which the nuclei of two atoms combine to form a heavier atom, releasing a large amount of energy is known as - noahpierce0627 this is FOR YOU!!!!! The local ice cream shop surveyed the customers to see which flavor of ice cream is most popular 125 people choose chocolate as their favorite which represents 25% of the customers surveyed how many total customers were surveyed A.425 B.20 C.500 D.32 What is one difference between dune and loess deposits?A. Dune deposits are sometimes found much farther away from their sources.B. Loess deposits are not useful for growing crops.C. Dune deposits are made of finer-grained and lighter material.D. Loess deposits are sometimes found much farther away from their sources. Five less than two times a number is 11. Which equation could be usedto find the number? Study the graph about seismic waves.Graph of P & S Wave Travel Times, showing Travel time in minutes across distance in kilometers for P and S waves. S wave starts at zero kilometers, zero minutes, and increases to 10,000 kilometers, 25 minutes. P wave starts at zero kilometers, zero minutes and increases to 10,000 kilometers, 13 minutes.What does the graph show?The S and P waves travel the same distance through Earths crust in the same amount of time.The P wave travels through Earths crust more quickly than the S wave travels.It takes the P wave 18 minutes to travel 6,000 km through Earths crust.It takes the S wave 11 minutes to travel 8,000 km through Earths crust. Which statement correctly describe the nucleus of the atom Who made a speech that started the first crusade help ; choose one answer !! In newspaper advertising, ________ advertising includes copy, illustrations or photos, headlines, coupons, and other visual components. classified audience display bleed tabloid In 1777, the new nation created a government based on a confederation of states. What weakened the powers of the central government?Congress had the power to declare war and make treaties.States were given the power to tax.States were given the power to control interstate trade.Congress had the power to issue bills of credit. The following information relates to the Fowler Company for 2014: Beginning accounts receivable 5,000 Credit Sales 40,000 Ending accounts receivable 7,000 What was the amount of cash collections?