Business, 18.03.2021 01:50 kk042563

a - Suppose that the stock price is $29, the risk- interest rate is 10% per year, the price of a 4-month European call option is $2.75, and the price of a 4-month European put option is $2.25. Both options have the strike price $28. Describe an arbitrage strategy and justify it with appropriate calculations. Please write your solution in complete sentences. B- Use the same data as in part (a), but suppose now that the call price is $3.25 and the put price is $1. Is there still an arbitrage opportunity? Describe an appropriate strategy and justify it with appropriate calculations. Please write your solution in complete sentences

Answers: 1

Show answers

Another question on Business

Business, 21.06.2019 14:20

On january 1, 2015, jon sports has a bond payable of $200,000. during 2015, it pays off $20,000 of the outstanding bond principal and issues a new $70,000 bond. there are no other transactions related to the bond payable account. what is jon sports' december 31, 2015, bond payable balance?

Answers: 2

Answer

Business, 21.06.2019 20:20

Jimmy owns an ice cream parlor. he designs a schedule for the different tasks the employees have to perform in order to prevent monotony at work. according to the schedule, if an employee makes waffle cones on a day, he serves ice creams the next day and clears the tables on the day after that. jimmy is using the approach at his ice cream parlor.

Answers: 2

Answer

Business, 22.06.2019 06:30

Selected data for stick’s design are given as of december 31, year 1 and year 2 (rounded to the nearest hundredth). year 2 year 1 net credit sales $25,000 $30,000 cost of goods sold 16,000 18,000 net income 2,000 2,800 cash 5,000 900 accounts receivable 3,000 2,000 inventory 2,000 3,600 current liabilities 6,000 5,000 compute the following: 1. current ratio for year 2 2. acid-test ratio for year 2 3. accounts receivable turnover for year 2 4. average collection period for year 2 5. inventory turnover for year 2

Answers: 2

Answer

Business, 22.06.2019 10:00

Your father offers you a choice of $120,000 in 11 years or $48,500 today. use appendix b as an approximate answer, but calculate your final answer using the formula and financial calculator methods. a-1. if money is discounted at 11 percent, what is the present value of the $120,000?

Answers: 3

Answer

You know the right answer?

a - Suppose that the stock price is $29, the risk- interest rate is 10% per year, the price of a 4-m...

Questions