The current stock price of IBM is $65. A put option on IBM with an exercise price of $62 sells for $7 and expires in 7 month(s). If the risk-free rate is 1.0% per year, what is the price of a call option on IBM with the same exercise price and expiration date (keep two decimal places)?

Answers

Answer 1

The price of a call option on IBM with an exercise price of $62 and expiration in 7 months is approximately $9.93.

To calculate the price of a call option on IBM with the same exercise price and expiration date, we can use the put-call parity formula. According to put-call parity:

\(Call Price - Put Price = Stock Price - Exercise Price / (1 + Risk-free rate) ^ {Time to expiration\)

Given that the put price is $7, the stock price is $65, the exercise price is $62, the risk-free rate is 1.0% per year, and the expiration period is 7 months (which is 7/12 years), we can substitute these values into the formula:

\(Call Price - $7 = $65 - $62 / (1 + 0.01) ^ {(7/12)\)

Simplifying the equation:

\(Call Price - $7 = $3 / (1.01) ^ {(7/12)\)

Call Price - $7 = $2.93001

Adding $7 to both sides of the equation:

Call Price = $2.93001 + $7

Call Price = $9.93

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Related Questions

Which of the following parts of a business plan include the cash flow projection and profit and loss projection?

Answers

Executive summary. This is your five-minute elevator pitch. ...
Business description and structure. This is where you explain why you're in business and what you're selling. ...
Market research and strategies. ...
Management and personnel. ...
Financial documents.

A large bakery buys flour in 25 kg bags. The bakery uses an average of' 4,860 bags a year. Preparing an order and receiving a shipment of flour bags involves a cost of $10 per order. Annual holding cost is $5 per flour bag. a) Determine the economic order quantity.
b) What is the average number of bags on hand (i.e., in inventory)?
c) How many orders per year will there be?
d)Calculate the total annual cost of ordering and holding flour.
e)If ordering costs were to increase by 50 percent order, by what percentage would the EOQ change?

Answers

a) Economic Order Quantity(EQO):Economic Order Quantity can be calculated using the following formula. \(EOQ = \sqrt{\frac{2DS}{H}}\)Where D = Annual Demand in Units S = Ordering Cost per Order H = Annual Holding Cost per UnitThen EOQ will be: \(EOQ

= \sqrt{\frac{2*4,860*10}{5}}\)= \(\sqrt{19,440}\) = \(139.28\) (approx.)The economic order quantity is 139 bags.b) Average Number of Bags on Hand:To find out the average number of bags on hand, we can use the following formula: \(Average\ number\ of\ bags\ on\ hand = \frac{EOQ}{2}\)= \(\frac{139}{2}\) = \(69.5\) (approx.)The average number of bags on hand is 69.5 bags.c)

Number of Orders per Year:We can find the number of orders per year by using the following formula: \(Number\ of\ Orders\ per\ Year = \frac{D}{EOQ}\)= \(\frac{4,860}{139}\) = \(34.89\) (approx.)So, there will be 34 orders per year.d) Total Annual Cost of Ordering and Holding Flour:Total Annual Cost of Ordering and Holding Flour can be calculated using the following formula:

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in determining whether an ad is deceptive, the ftc will view it from the perspective of the most vulnerable consumer.

Answers

FTC views deceptive ads from the perspective of the most vulnerable consumer, protecting those who may be more susceptible to misleading or false advertising.

When evaluating the deceptive nature of an advertisement, the Federal Trade Commission (FTC) considers the perspective of the most vulnerable consumer. This approach ensures that the agency focuses on protecting individuals who may be more easily swayed or misled by advertising claims. By prioritizing the interests of the most vulnerable, the FTC aims to safeguard consumers who are more susceptible to deceptive practices and ensure fair and truthful advertising standards are maintained.

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Leonardo, who is married but files separately, earns $80,000 of taxable income. He also has $15,000 in city of Tulsa bonds. His wife, Theresa, earns $50,000 of taxable income.

12.

Required information

If Leonardo earned an additional $30,000 of taxable income this year, what would be the marginal tax rate (rounded) on the extra income for year 2015?

27. 75%

17. 50%

25. 00%

28. 00%

None of these

Answers

To put it simply, the average tax rate can be determined by dividing the total amount of taxable income by the total amount of taxes owed. Lower marginal tax rates will always exist as long as they are higher than the average.

What is the typical income tax rate?

The rate that is determined by dividing the amount of income tax based on total income by such total income is referred to as the "Average Rate of Income-tax."

How does the average tax rate relate to the marginal tax rate?

The proportion of a taxpayer's income that is subject to taxation is known as their effective tax rate or average tax rate. A taxpayer's marginal tax rate, on the other hand, is the tax rate applied to their final dollar of income. The average tax rates paid by taxpayers are typically significantly lower than their marginal rates.

The Marginal Tax Rate: What Is It?

The amount of additional tax paid for each additional dollar earned as income is known as the marginal tax rate. The total amount of tax paid divided by total income earned is the average tax rate. With a marginal tax rate of 10%, 10% of every subsequent dollar earned would be taxed.

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Do you think Lance is right to be concerned about Leroy's plan for growth? Justify your answer.

Answers

Lance is right to be concerned about Leroy's plan for growth. Leroy's plan is not feasible, and Lance should communicate his concerns with Leroy.

Lance must convey his concerns to Leroy to assist him in developing a more feasible growth strategy. Leroy's plan is to double the size of his business within a year. It is a commendable goal, but the approach he has outlined is not feasible. Leroy is unable to raise the capital required for this growth strategy. He does not have the required cash reserves to finance the expansion, and acquiring the financing required for the expansion could result in high-interest rates. Leroy is also not ready to scale up his business.

He has inadequate staff and no systems or processes in place to ensure the smooth functioning of the business. He will need to employ more people, and he must have systems in place to manage these new employees effectively. Moreover, the market may not be ready for the company's growth. The company's sales growth may slow, leading to a decline in revenue. Leroy must do market research before scaling up his business. Lance should discuss all of these issues with Leroy and advise him on what to do next.

To summarize, Lance is justified in being concerned about Leroy's growth plan. It is critical for Leroy to recognize that scaling up his business would necessitate more than simply doubling its size. Leroy must reassess his goals and come up with a more realistic plan for growth.

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What are healthcare cost estimates for a retired couple starting in 2030 and 2040?

pls help this is really important i don't want to fail

Answers

The healthcare cost that estimates for a retired couple starting in 2030 and 2040 is the $16·04 trillion and $24·24 trillion.

What is healthcare cost?

Healthcare cost is defined as the actual expenditures of providing health-care services, such as procedures, drugs, and therapies.

According to the past trends and relationships, in 2030, the healthcare cost are $16·04 trillion and, in 2040, $24·24 trillion (20·47–29·72) will be spent on health.

In terms of per capita growth, this rises from $1279 in 2014 to $2872 (UI 2426–3522) in 2040, with an annualised rate of 30% (24%–38%).

Therefore, according to the estimations, the healthcare cost for 2030 is $16·04 trillion.

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Rosa plans to give a presentation to her co-workers on how to use her company's new requisitions process, and she is using presentation software to create a visual aid. each slide uses 30-point headings, no more than six bullet points, and black text on a white background with large, dark red and blue paint splashes. she is careful to use animation only to transition to new major points, and subpoints. what has rosa done wrong?

a) her slides are inconsistent.

b) her slides contain too much information.

c) her slides are too busy.

d) her information is too small.

e) she is using too much animation

Answers

Rosa has prepared a very well presentation but the only mistake she did is that her slides contain too much information.

What are the basic points to be considered while making presentation?

First and foremost point to be consider for making the presentation is that- introduction, body and conclusion must be there.

Too much information should not be added on a single slide. It must have some images as well for the attraction.

The ideas added in the presentation must have the clarity.

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A real estate agent showed Gavin several pictures of lakeshore property while they were eating a delicious, mouth-watering meal. Later, when Gavin toured the property, he drooled with delight. For Gavin, the lakeshore property was a Group of answer choices US. UR. CS. CR.

Answers

For Gavin, the lakeshore property would be the US (Unconditioned Stimulus). The US refers to a stimulus that naturally elicits a response without any prior conditioning. In this case, the pictures of the lakeshore property and the mouth-watering meal served as the unconditioned stimulus, which naturally triggered Gavin's drooling response (UR or Unconditioned Response).

It's important to note that in classical conditioning, a conditioned stimulus (CS) is paired with an unconditioned stimulus (US) to eventually evoke a conditioned response (CR). In this scenario, if Gavin had developed a drooling response specifically to the pictures of the lakeshore property (CS), that would be considered a conditioned response (CR).

However, based on the given information, it appears that Gavin's drooling was a natural, unconditioned response to the appealing stimuli of the pictures and the meal.

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Lightskins or Darkskins


Or Other ?

Answers

Answer:

any kind of boy

Explanation:

I have no type

Income received by households through the lending of their money to corporations and business firms is an example of
income.

Answers

Answer:

Interest / Dividend Income

Explanation:

Answer:

Answer for EDGE is C or Interest

Explanation:

Previous
4
Next
Lifelong Learning: Mastery Test
4
Select the correct answer.
Why do many organizations encourage their employees to be lifelong learners?
O A employees will be more able to handle increasing responsibilities
OB. employees will be more likely to follow company policies
OC employees will be more likely to remain loyal to the company
OD. employees will be more likely to interact well with each other
Reset
Next

Answers

Answer: A. employees will be more able to handle increasing responsibilities.

Explanation:

Lifelong learning refers to the ongoing pursuit of knowledge for personal or professional reasons. When a person is a lifelong learner, such person has a growth mindset and pushes himself or herself to find new ideas to solve challenges.

Several organizations encourage their employees to be lifelong learners in order for such employees to be able to handle increasing responsibilities. Some organizations send their employees to study some courses which will help in their growth and development and also to be able to handle certain responsibilities.

what is the biggest health concern for employees of this company when it comes to technology
and what is a strategy the company could put in place to lower this risk?
Yelppp

Answers

Answer:Robots replace humans

Explanation:tjeteare will always remains some jobs woch can be done only by human hand.

Find Lindsay Remson's total deposit for two checks of $112.54 and
$453.24 and cash of 3 one-dollar bills, 4 five-dollar bills, 7 ten-dollar
bills, 15 quarters, 12 dimes, 34 nickels, and 64 pennies. Less $10.00
cash received.

Answers

Answer: 649.78

Explanation: addition

Has the comparative advantage in making guitars. has the comparative advantage in making violins.

Answers

Spain has the comparative advantage in making guitars, while Italy has the comparative advantage in making violins.

Comparative advantage is the ability of a country or individual to produce a particular good or service at a lower opportunity cost than another country or individual.Assuming the two countries in question are country A and country B, if country A can produce guitars at a lower opportunity cost than country B, then it has a comparative advantage in making guitars.On the other hand, if country B can produce violins at a lower opportunity cost than country A, then it has a comparative advantage in making violins.This means that it would be more efficient for country A to produce more guitars and for country B to produce more violins, and then they can trade with each other to benefit from the comparative advantage.The opportunity cost of producing a good is the value of the next best alternative forgone.

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Answer:

Annie's Music makes guitars while the music factory makes violins

Explanation:

edge 2023

what are the two main sources of income for the federal

Answers

Answer:

The two main sources of revenue for the federal government are personal income taxes and social insurance taxes.

Answer:

Taxes and

Explanation:

Imagine that you have been hired to create an ad campaign for a product. The client wants you to create three different taglines to persuade people to buy the product: one that appeals to authority, one that is based on a fallacy of presumption, and one based on argumentum ad populum. Briefly describe your product and provide the three taglines. (THIS IS CRITICAL THINKING!!)

Answers

The product is a new type of water filtration system for home use.

Tagline appealing to authority: "Endorsed by top water experts, our filtration system is the choice of professionals."

Tagline based on fallacy of presumption: "Upgrade to our filtration system and never worry about the quality of your water again."

Tagline based on argumentum ad populum: "Join the millions of satisfied customers who trust our filtration system for their home's water needs."

It's important to note that using fallacies and manipulation tactics in advertising is not ethical and can be misleading to the consumer. It's better to use truthful, clear and honest information to promote a product and its features and benefits.

prepare a statement of retained earnings in proper form for white corporation for the year ended December 31 2012 from the following

Answers

White Corporation's statement of retained earnings in correct form for the year ended December 31, 2012 will be $5,200.

A year-end statement of retained earnings is what?

A crucial financial statement that details the amount of earnings a firm has accumulated and held from its founding is the statement of retained earnings. The figures reveal information about the financial health of a firm and the owner's perspective on expanding and reinvesting in their enterprise.

What does the initial retained earnings statement look like?

The balance of retained earnings from the previous year that you are carrying over should be the first item on the statement of retained earnings. This sum is based on the balance sheet from the previous year.

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Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT?

Answers

All of the following, with the exception of conditions, are required.

Describe insurance.

One party will agree to compensate another in the event of a certain loss, damage, or injury in exchange for a fee in order to safeguard oneself from financial loss. It is a risk management technique that is typically used to guard against the danger of a hypothetical loss that may or may not materialise.

An underwriter, insurer, firm, or carrier is a company that provides insurance. A person or organisation that obtains insurance is known as a policyholder, whereas a person or organisation that the policy protects is known as an insured.

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Insurance

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John Wang’s employees are asking for a bigger and faster storage device. They recommend a one terabyte solid state drive. John has never heard of this and you need to teach him some basics about how computers work, what a storage device is, and how to measure storage capacity. Find your answer in ELM A.

Answers

A 1-terabyte solid-state drive has a storage capacity of 1024 gigabytes.

John Wang’s employees are asking for a bigger and faster storage device. They recommend a one-terabyte solid-state drive. John has never heard of this and you need to teach him some basics about how computers work, what a storage device is, and how to measure storage capacity. A storage device is a hardware component that stores or saves data temporarily or permanently. It holds digital data, such as audio, video, and text, which can be accessed later. Storage devices could be internal or external. Internal storage devices: They are storage devices found inside the computer. Hard disk drives (HDD) and solid-state drives (SSD) are examples of internal storage devices. The storage capacity of a device is the amount of digital data it can store. It is usually measured in bytes, kilobytes, megabytes, gigabytes, terabytes, petabytes, and exabytes.1 byte = 8 bits.1 kilobyte (KB) = 1024 bytes1 megabyte (MB) = 1024 kilobytes1 gigabyte (GB) = 1024 megabytes1 terabyte (TB) = 1024 gigabytes. Therefore, a 1-terabyte solid-state drive has a storage capacity of 1024 gigabytes.

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A group of teens in your town meet and agree to charge a flat fee of five dollars per hour for babysitting. They charge the same rate no matter how many children there are, or when the service is needed. Then they divide areas of town on a map between them, agreeing to only serve customers within their respective areas. Within weeks they have gained most of the business in town, driving out other teens that cannot lower their rates. The babysitting market in your town has become

Answers

The babysitting market in the town has become an oligopoly.

What is an Oligopoly?

An Oligopoly is an industry which is influenced by the firms.

In oligopoly, there are very few sellers and all are influenced by the behavior of the other sellers.

In this market, sellers deal in homogenous product.

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Answer: am oligopoly

Explanation: i got it right

The weather can influence all of the following EXCEPT:
A consumer satisfaction
B. production costs
C. quality of a good
D. quantity supplied

Answers

Answer:

A consumer satisfaction

Explanation:

Consumer satisfaction is derived from the consumption of goods and services. The weather does not influence consumer satisfaction.

On the other hand weather influences, production costs, quality, and quantity of goods. During extreme weather, accessing materials becomes a challenge. Transportation becomes a challenge, which leads to increased cost. Harsh weather creates a shortage of materials affecting the quantity and quality of goods produced.

Answer:

A

Explanation:

Hixson Company manufactures and sells one product for $34 per unit. The company maintains no beginning or ending inventories and its relevant range of production is 20,000 units to 30,000 units. When Hixson produces and sells 25,000 units, its unit costs are as follows: 2. if 24,000 units are produced, what is the variable manufacturing cost per unit produced? what is the average fixed manufacturing cost per unit produced? (round your answers to 2 decimal places.)

Answers

Answer:

the variable manufacturing cost per unit produced at 24,000 units is $20.83, and the average fixed manufacturing cost per unit produced is $12.00.

Explanation:

We can use the information given to calculate the variable and fixed manufacturing costs per unit produced:

Total Cost = Variable Cost + Fixed Cost

At 25,000 units:

Total Cost = $800,000

Variable Cost = Direct Materials + Direct Labor + Variable Manufacturing Overhead

Variable Cost per Unit = Variable Cost / Number of Units

Fixed Cost = Total Cost - Variable Cost

Fixed Cost per Unit = Fixed Cost / Number of Units

Direct materials cost per unit = $10.00

Direct labor cost per unit = $8.00

Variable manufacturing overhead per unit = $2.00

Variable Cost per Unit = $10.00 + $8.00 + $2.00 = $20.00

Number of Units = 25,000

Variable Cost per Unit = $500,000 / 25,000 = $20.00

Fixed Cost = $800,000 - $500,000 = $300,000

Fixed Cost per Unit = $300,000 / 25,000 = $12.00

At 24,000 units:

Variable Cost per Unit = $500,000 / 25,000 = $20.83

Fixed Cost per Unit = $300,000 / 25,000 = $12.00

Therefore, the variable manufacturing cost per unit produced at 24,000 units is $20.83, and the average fixed manufacturing cost per unit produced is $12.00.

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Which Important personal quality does Jane seem to possess?
Jane is friendly and kind toward her coworkers. She makes interesting conversation with them during lunch. Her attitude helps to maintain a
harmonious atmosphere at work. Jane thus possesses an important personal quality known as

Answers

Answer:

kindness

Explanation: sorry im guessing by what the paragraph tells me..

Answer:

courteousness

Explanation:

These are all attributes of a courteous individual.

OJT is best for large groups.

True
False

Answers

Answer - true
I think this is right

Explain a situation where user would transpose data on a spreadsheet in Microsoft Excel. Give at least one example to illustrate your reasoning. Use details to support your answer.

Answers

Answer:

below

Explanation:

function must be entered as an array formula in a range that has the same number of rows and columns, respectively, as the source range has columns and row

Vanessa uses credit cards because she likes to earn airline miles and cash-back rewards. She always pays off her balances in full each month and never has to pay interest or any finance charges. What is Vanessa in this scenario?

A.
a cosigner

B.
a credit counselor

C.
a convenience user

D.
a borrower

Answers

Answer:

c. a convenience user

Explanation:

i took test

Answer: c. a convenience user

Explanation:

What is meant by factors of production​

Answers

The factors of production​: In economics, elements of production are the resources humans use to provide items and services.

Production is the method of making or manufacturing goods and merchandise from raw materials or additives. In different words, manufacturing takes inputs and makes use of them to create an output that is healthy for consumption – an awesome product that has a fee to a given up-user or consumer. production is one of the maximum vital tactics within production and is a core part of what it manner to be a producer. without this hobby, no completed items could be created, and there might be nothing to sell to clients.

Production is the method of making, harvesting, or creating something or the quantity of something that becomes made or harvested. An example of manufacturing is the introduction of furniture. An instance of production is harvesting corn to consume. An example of production is the amount of corn produced. There are 3 common sorts of basic manufacturing systems: the batch gadget, the continuous machine, and the mission device. inside the batch device, widespread-cause devices and techniques are used to provide small portions of output (goods or services) with specifications that modify significantly from one batch to the following.

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A study has found, among 100 students at a school, that enrollment in drama classes is correlated with high rates of participation in social-
service projects. What can we conclude from this correlation for this population?
O Both of the above
O Neither of the above.
O Drama classes cause increased volunteerism
Volunteering causes interest in drama,

A study has found, among 100 students at a school, that enrollment in drama classes is correlated with

Answers

Answer: B) Neither of the above

Explanation:

Correlation does not lead to causation, no matter how strong the correlation may be. You'll need to do an experiment to see if one variable causes the other. There may be other factors that aren't being considered here. We consider these confounding variables.

An example of correlation doesn't lead to causation could be this: In the summertime, ice cream sales increase and the amount of sunburns increase. Both ice cream sales and sunburns are strongly positively correlated. Does eating ice cream cause a sunburn? The answer is "no" because clearly the sun is responsible for that. So the sun would be the confounding variable here. Specifically, the amount of sunlight exposure would be key here.

As a ground control employee at the airport, neal uses hand signals to guide the planes to the tarmac. Which element of nonverbal communication is neal using?.

Answers

Based on the fact that Neal who is a ground control employee at the airport uses hand signals to guide the planes to the tarmac, the element of nonverbal communication which Neal is using is known as gestures

What is Non-Verbal Communication?

This refers to the type of communication that is used by a person to send a message to a person and to receive feedback and some examples or elements of this nonverbal communication include the use of expressions, gestures, paralinguistics, etc

Hence, we can see that because Neal uses hand signals in order to direct the planes onto the tarmac based on his job description as a ground control employee at the airport, he is making use of gestures.

With this in mind and from the given explanation, it can be seen that the element of nonverbal communication which Neal is using is known as gestures

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A business person uses 1500 units of a specific subassembly part yearly, with an annual holding cost of $45 per unit. each order placed costs them $150. in one year they find out that their forecasting department has made an error in estimating the demand and instead of the correct demand, they had reported the same 1500 units and calculated the eoq resulting in an error of 1% underestimation in optimal total cost. neglecting purchasing cost in your calculations, what is the correct demand value?

Answers

The correct demand value will be 1515.

What is demand value?

The Demand value is the quantity's average value during a specific time period.

How to determine the demand for a product?

Market demand is the level of consumer desire for a given product over a specific time period. A lot of variables influence market demand, including the number of consumers looking for your goods, their willingness to pay for them, and the amount of your product that is readily available from your business and your rivals.

Steps to calculate demand value

EOQ = sq. root( 2D × TC/HC)

Where EOQ is the Economic Order Quantity for a particular product

D is the demand for the particular product

TC is the total cost of producing the product

HC is the holding cost of producing the product

Substituting we get:

EOQ = Sq. root [ 2 × 1500 ×150 /45]

Solving we get EOQ = 100 units.

After the mistake correction, the TC is 148.5

Substituting values we get:

100 = Sqroot [ 2D × 148.5 / 45]

Solving the equation we get the Demand value as 1515.

Therefore, the demand value is 1515.

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