You wish to buy a euro call option expiring in 6 months with a strike price of $1.35. the volatility of the $/euro exchange rate is expected to be 8.36% on an annualized basis. currently the interest rate on the euro is currently 0.00% whereas it is 1.5% on the dollar. what is the price of this call option? what is corresponding put option worth? what happens to the price of both the call and put option when the volatility goes to 10%. what are the new prices? what happens to the price of both the call and put option as we get closer to the expiration date? what is the new price of the call if no other factors change but we are 3-months away from expiration?

In the united states, one worker can produce 10 tons of steel per day or 20 tons of chemicals per day. in the united kingdom, one worker can produce 5 tons of steel per day or 15 tons of chemicals per day. the united kingdom has a comparative advantage in the production of:

M. cotteleer electronics supplies microcomputer circuitry to a company that incorporates microprocessors into refrigerators and other home appliances. one of the components has an annual demand of 235 units, and this is constant throughout the year. carrying cost is estimated to be $1.25 per unit per year, and the ordering (setup) cost is $21 per order. a) to minimize cost, how many units should be ordered each time an order is placed? b) how many orders per year are needed with the optimal policy? c) what is the average inventory if costs are minimized? d) suppose that the ordering cost is not $21, and cotteleer has been ordering 125 units each time an order is placed. for this order policy (of q = 125) to be optimal, determine what the ordering cost would have to be.

Depasquale corporation is working on its direct labor budget for the next two months. each unit of output requires 0.61 direct labor-hours. the direct labor rate is $8.70 per direct labor-hour. the production budget calls for producing 6,700 units in may and 7,100 units in june. if the direct labor work force is fully adjusted to the total direct labor-hours needed each month, what would be the total combined direct labor cost for the two months?