$50. The stock pays a dividend of $5 in 3 months. A 6-month European put option on the stock has a strike price of $48 and a premium of $4.38. The continuously compounded interest rate is 8%. Calculate the premium for a 6-month European call option on the stock with a strike price of $48. * A 1.02 * B 3.36 * C 3.46 * D 4.38 * E 5.40 2 1. An "exchange call option" gives the owner of the option the right to give up one share of Stock A in exchange for receiving one share
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Chapter 15 Quiz 15.1) A portfolio is currently worth $10 million and has a beta of 1.0. An index is currently standing at 800. Explain how a put option with a strike price of 700 can be used to provide portfolio insurance. Index goes down to 700 10*(800/700)= 8.75 million Buying put options= 10‚000‚000/800= 12‚500 If you buy the options at 800‚ the value will be 12‚500 times the index with a strike price of 700 therefore providing protection against a drop in the value of the portfolio below
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Question 1: Consider an option on dividend-paying stock when stock price $30‚ the exercise price is $29‚ the risk-free interest rate is 5% p.a.‚ the volatility is 25%p.a. and time to maturity is 4 months. Assume that the stock is due to go ex-dividend in 1.5 months. The expected dividend is 50cents. a. b. c. what is the price of the option if it is a European call? What is the price of the option if it is a European put? Use the results in the Appendix to this chapter to determine whether there
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ACNIELSEN M’SIA ENTERS STRATEGIC ALLIANCE WITH 99 SPEEDMART. (From Bernama The Malaysian National News Agency) from BERNAMA‚ The Malaysian National News Agency KUALA LUMPUR‚ July 12 (Bernama) -- Marketing information provider‚ ACNielsen and 99 Speedmart retail chain has signed a strategic alliance which will give ACNielsen access to 99 Speedmart point-of-sale (POS) data and provides 99 Speedmart with a suite of reports via ACNielsen’s Retailer Advisor Personal software 99 Speedmart offers a wide
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Grand Strategy Matrix: Grand Strategy Matrix has become a popular tool for formatting alternative strategies besides SWOT Matrix‚ SPACE Matrix‚ BCG Matrix and IE Matrix. Grand Strategy Matrix has four quadrants. All the organization can be positioned in one of the quadrant in Grand Strategy Matrix. Evaluative dimensions: 1. Competitive position and 2. Market growth. DPS has been positioned in the quadrant 1. A firm in quadrant 1 of Grand Strategy Matrix has strategies which put the
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UNIVERSITI MALAYSIA SARAWAK Assignment EBA 6423 Strategic Marketing Individual Assignment Case 1: Price the Product Name: Martina ak Minggat Matrix no: 12030020 Prepared for: Prof Dr Ernest Cyril De Run CASE STUDY 1: Which option would you choose‚ and why? 1. No. Pricing the entire menu at $1.29 would make things simple for the company and consumers‚ as well as offering the most potential profit per item. However‚ the challenge would be to convince consumers that the $1
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Comparison Matrix | Article 1 | Article 2 | Article 3 | Title/Author(s) | Transformational Leadership in the Public Sector: Does Structure Matter?Wright & Pandey | The Effect Of Transactional and Transformational Leadership Styles on the Organizational Commitment and Job Satisfaction of Customer Contact Personnel Emery & Barker | The effectiveness of antenatal care programmes to reduce infant mortality and preterm birth in socially disadvantaged and vulnerable women in high-income countries:
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The purpose of this case study is to discuss the issues related to stock options and how they should be accounted for. Introduction In the early 1990s‚ FASB proposed an accounting rule calling for corporations to recognize compensation expense for certain stock options when they were granted to executives and employees. This proposal was met with strong opposition from many different sources including: Congress who passed a resolution by vote urging FASB to drop the proposed standard‚ business
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SUBMITTED BY GYANENDR KOIRALA (4829609) SONAM JANGBU LAMA (4829610) HAMITI YILI & (4829964) PURAN BASNET (4829584) SUPERVISOR NUMBER OF WORDS “Incl. Bibliography & Abstract” 4832 FINN SANDER COVENTRY UNIVERSITY DECEMBER 10TH‚ 2012 1 Table of Contents Readers Guide ........................................................................
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You are cautiously bullish on the common stock of the Wildwood Corporation over the next several months. The current price of the stock is $50 per share. You want to establish a bullish money spread to help limit the cost of your option position. You find the following option quotes: 4. To establish a bull money spread with calls‚ you would _______________. A. buy the 55 call and sell the 45 call B. buy the 45 call and buy the 55 call C. buy the 45 call and sell the 55 call D. sell the 45 call
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