You would like to hold a protective put position on the stock of Avalon Corporation to lock in a guaranteed minimum value of $50 at year-end. Avalon currently sells for $50. Over the next year, the stock price will increase by 10% or decrease by 10%. The T-bill rate is 5%. Unfortunately, no put options are traded on Avalon Co.
What would have been the cost of a protective put portfolio?
$48.81
$51.19
$52.38
$53.38

Answers

Answer 1

The aim is to maintain Avalon Corporation's stock value at $50 or more by year-end, but there are no put options. The stock price could fluctuate by 10%, with a T-bill rate of 5%. A protective put portfolio would cost $52.38. Thus, option C is correct.

Since there are no put options traded on Avalon Co., the only way to create a protective put portfolio is by combining the purchase of the stock with the purchase of a put option on a similar company. The put option should have an exercise price that is equal to the guaranteed minimum value of $50, and it should expire at year-end.

To calculate the cost of the protective put portfolio, we need to find the price of the put option and the number of shares of the stock needed to create the portfolio.

The price of the put option can be found using the Black-Scholes option pricing model with the following inputs: stock price of $50, exercise price of $50, risk-free rate of 5%, time to expiration of one year, and implied volatility based on the volatility of a similar company.

Assuming an implied volatility of 20%, the price of the put option would be $2.19. To create a protective put portfolio that guarantees a minimum value of $50 at year-end, we need to purchase one share of Avalon Co. and one put option for a total cost of $52.19.

If the stock price increases by 10%, the portfolio will be worth $55. If the stock price decreases by 10%, the put option will be exercised, and the portfolio will be worth $50. Therefore, the correct answer is (c) $52.38.

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Related Questions

______ Is a market in which a large number of suppliers compete with each other to satisfy the needs and wants of a large numbers of consumers at a competitive price.???

Answers

Answer : Monopolistic competition

Answer:

Monopolistic Competition

Explanation:

In a monopolistic competitive market, there are large numbers of sellers who do not sell identical products instead they sell differential products. They compete with each other at a competitive price. The products could be differentiated in many ways including quality, style, location and even brand name. Since they compete at a competitive price, if there is a substantial rise in the price of any of the products, the buyers could quickly shift from one product to another. The most crucial factor behind product differentiation is because of geographical factors. Under a monopolistic competitive market, the sellers do not have any influence over customer loyalty and limited control over the price.

One positive impact that industrialization has had is that.

Answers

One positive impact that industrialization has had is that industrialization has been a source of many jobs for people.

What is industrialization?

Industrialization refers to the development of industries in a country or region on a wide scale.

One positive impact that industrialization has had is that industrialization has been a source of many jobs for the people.

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Explain why you think Americans can do yo ensure workers have decent working conditions and pay?

Answers

Answer:

Americans are expected to make sure that discrimination in the workplace is avoided.

How does checkout assist help improve the customers checkout experience

Answers

A customer with the help of check-out assist can scan item barcodes before paying for their total shop without needing one-to-one staff assistance.

Self-service checkouts (SCOs), also known as aided checkouts (ACOs) or self-service checkouts, are machines that allow customers to complete their own transactions from a merchant without the need for a traditional staff checkout.

Self-service checkouts are most commonly found in supermarkets, but they are also found in department and convenience stores. Most self-checkout facilities are overseen by at least one staff member, who frequently assists customers with transaction processing, price correction, or other assistance.

Therefore, checkout assist help improve the customers checkout experience.

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Campbell's, the soup manufacturer, maintains a low-level of advertising during the entire year, but Campbell's advertises heavily during the winter months when people are cold and looking for something to help warm them up. What kind of advertising strategy is Campbell's most likely using

Answers

Answer:

Most likely to use commercial advertisements\ing, showing snow for the cooler winter times, Thanksgiving dinners with people and their loved ones for a warm thanksgiving dinner, this could be followed along with kids and/or elders getting a cold or flu during this winter season using Campbell’s soup as a way for them to “warm up”, because who doesn’t want a hot bowl of soup when they have a cold?

the independent auditors' audit design prepared prior to the start of fieldwork is appropriately considered documentation of:

Answers

The impartial auditors' audit sketch prepared prior to the start of fieldwork is as it should be viewed documentation of:  planning.

An unbiased auditor is a licensed public accountant (CPA) or chartered accountant (CA) who examines the monetary files and enterprise transactions of a employer with which they are no longer affiliated.

Why should an auditor be independent?

The auditor  be unbiased from the client company, so that the audit opinion will now not be influenced via any relationship between them. The auditors are anticipated to supply an unbiased and truthful professional opinion on the economic statements to the shareholders.

What are the two sorts of auditor independence?

There are two essential elements to independence which need to be unusual from every other: independence in reality (real independence) and independence in look (perceived independence). Together, each varieties are critical to acquire the goals of independence.

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Has anyone got some beginner tips on starting a business??

Answers

Answer: a little bit

Begin with like a detailed plan. This one is a must,Develop an in-depth plan that fully details how you'll attack the challenge aheadHave the Right MindsetConsistency is KeyNew business owners tend to feed off their motivation initially but get frustrated when that motivation wanes. This is why it’s essential to create habits and follow routines that power you through when motivation goes away.Refine Your Business IdeaKnow Your Competitors and MarketChoose Your Business Structure

And there is plenty more of tips that is too much for me to type, have a wonderful day!!!!!

What steps must you perform if you want to see values in the low stock and out of stock boxes on the products and services screen?

Answers

Activate the track inventory quantity option on the manual setting, then fill up the ordering area for the items in your stock.

What is stock?

Stock is the number of finished goods that are available for purchase, and includes both industrial products and the raw materials used to create them.

Stock or inventory needs to be maintained as the product will choose in the fluctuation if there is any type of changes like withdrawal or entry of the product or stock in the inventory.

To do so, the company and the firm must include a track inventory method that is related to the quantity of the inventory.

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she ripped my (finish the sentance)

Answers

Answer:

band-aid off my knee?

Explanation:

Answer:

duct-tape off of my mouth

Explanation:

Wayne is responsible for implementing a companywide policy that would impact internal and external stakeholders. Which of the following is an example of when using his moral imagination before implementing the policy?
A) Wayne considers whether his boss will offer him a promotion if the policy is implemented successfully
B) Wayne considers whether implementing the policy will impact his salary
C) Wayne considers the pros and cons of the policy and how will impact all the stakeholders
D) Wayne considers if someone else should make the decision, sparing him from the blame if the policy is received poorly

Answers

Wayne using his moral imagination before implementing the policy as it involves considering the pros and cons of the policy and how it will impact all the stakeholders involved.

The correct option is C.

Moral imagination refers to the ability to envision and consider the ethical implications and consequences of one's actions. In this scenario, Wayne's responsibility is to implement a companywide policy that would impact both internal and external stakeholders.

To effectively use his moral imagination, Wayne should consider the potential pros and cons of the policy and how it will affect all the stakeholders involved. This includes thinking about the potential benefits and drawbacks for employees, customers, suppliers, and other relevant parties. By thoroughly evaluating the potential impact on each stakeholder group, Wayne can make a more informed and ethically responsible decision.

Considering factors such as employee well-being, customer satisfaction, and overall organizational values can help Wayne ensure that the policy implementation aligns with ethical considerations and the best interests of all stakeholders.

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Disadvantages of choosing a job that is extremely popular or in demand

Answers

The disadvantage of choosing a job that is very popular or a job that is in high demand is that after a while such a job may become saturated or it would become monotonous.

What is a high demand job?

This is the term that is used to refer to a job that the people that wpould employ labor are constantly in need of. Such a job is one that would require the people that have the qualification to opt in and get the places and the roles that they are to fill.

The issues that may arise from such a job that is in high demand is that after a period, such a job may have a lot of persons that would want to fulfil the role.

The number of qualified persons may become more than the job that is available for the people to do in the long run.

Hence this is a disadvantage. Therefore I would conclude by saying that the disadvantage of choosing a highly popular job is that the number of persons that are willing to fulfil the role may exceed the job overtime.

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Of the items in the following list, which one(s) should appear in a payroll register? Hours worked Home address Name Shifts worked

Answers

Payroll registers generally focus on data related to employee compensation and work hours. Personal information such as home addresses is usually maintained separately in HR or employee records for privacy and security purposes.

In a payroll register, the following items should typically appear:

1. Name: The name of the employee is an essential piece of information to identify and track individual payroll records.

2. Hours worked: The number of hours worked by each employee is recorded in the payroll register to calculate wages and ensure accurate payment.

3. Shifts worked: Keeping track of the shifts worked by employees helps monitor attendance and schedule adherence.

However, the home address is not typically included in a payroll register as it is considered personal and sensitive information. Payroll registers generally focus on data related to employee compensation and work hours. Personal information such as home addresses is usually maintained separately in HR or employee records for privacy and security purposes.

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what is an imaginary line that extend horizontally from east to west in a globe?​

Answers

Answer:

The imaginary east-west horizontal lines, which run parallel to the equator, are called Latitudes or Parallels.

Answer:

The imaginary horizontal lines running in east-west direction on the Earth's surface are known as Latitudes or parallels of Latitude as they are Parallel to each other.

Explanation:

John Maynard Keynes argued that governments should:

Answers

Answer:

Keynes believed that governments should increase spending and lower taxes in order to stimulate demand in the face of recession.

Explanation:

Answer:

Spend more money to help reduce unemployment.

Explanation:

powerpoint what strategies will be most effective for motivating the team, managing conflict, ensuring success, and fostering collaboration? cite specific motivational theories, conflict-resolution strategies, and leadership strategies in your answer

Answers

Based on Hicks, one of the difficult aspects of the job is figuring out how to resolve conflicts among team members. Although things go wrong at work occasionally, it's crucial to learn strong communication skills.

Which motivational theory is the best?

Maslow's pyramid of needs Abraham Maslow, a psychologist, published one of the most well-known motivational theories, the hierarchy of needs, in his 1943 article "A Theory of Human Motivation." In essence, Maslow's hierarchy describes five layers of human needs, which are typically depicted as a pyramid.

What are the top three theories of modern management?

A management can then assess a worker's motivation and performance using maths and statistics. It basically involves figuring out what makes an employee tick. The modern philosophy of management is divided into three sections: quantitative, systems, and contingency.

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llus Patrick is selling a new hair product. He hopes to sell 10 bottles a month if he spends a one-time $100 on advertising. He is selling each bottle for $12. The product costs him $5.00 to make per bottle. What would the planned profit be after one year of sales?
A. $600 B. $740 C. $1050​

Answers

Answer:

B. $740

Explanation:

In the given scenario we will be analysing the cost of production versus the revenue earned by Patrick. The difference between the two will give our profit

Total number of bottles produced a year = 10 * 12 = 120 bottles

Cost of production = Advertising + manufacturing cost

Cost of production = 100 + (120 * 5) = $700

Revenue = 120 * 12 = $1,440

Profit = 1,440 - 700 = $740


Role o vision, mission,and objectives in entreprenial development in Nigeria businesses? Pls describe

Answers

Answer:

Developing a vision and mission statement is crucial to the success of community initiatives. These statements explain your group's aspirations in a concise manner, help your organization focus on what is really important, and provide a basis for developing other aspects of your strategic plan

Explanation:

it help u

Perfect Pasta plans to open five new stores before 2018. However, if the economy does not improve and if consumer confidence does not rise as hoped, it might open just two stores. This backup plan is an example of a(n) ________ plan

Answers

The answer is CONTINGENCY PLAN

What is the hazard? Chris works for a city public works department. One hot afternoon the temperature outside reached 92 degrees. While Chris was shoveling dirt in a vacant lot, he started to feel dizzy and disoriented. He fainted due to the heat.

Answers

Answer: dehydration

Explanation:

Answer:

dehydration and heat exhaustion.

Explanation:

I hope this helps! :)

MPUM BOTTLE MANUFACTURERSTABM)
Mpumi Bottle Manufacturers is a large business well known for supplying quality plastic
bottles, is the most customer-centric company, that build a place where people can come
find any bottle. The financial manager borrowed money from Blue bank at a high-interest
rate to buy material and equipment for manufacturing bottles. MBM has recently appointed
two experienced employees who are responsible for branding the bottles
The demand for branded bottles increased in other provinces they opened another branch
in North West Province. Raheem Trading opened a similar business that offers the same
services at a lower price,
Gail, the director shares the understating of how things are done in the business to
accomplish the business mission Raheem Trading's board of directors strongly believes in
good leadership and management for the success of the business.
Bennie the purchasing manager, at Raheem Trading ensures that there is enough stock
available for continuous production, Place orders with suppliers and follow up on them.
The credit department supervisor educates consumers on making the right choices when
they apply for credit
1.1.1 Quote the visions statement of mpumi bottle manufacturers in the case study above
1.1.2 Name ONE component/feature of each business environment in the cas study above .motivate your answer by quoting from the case study

Answers

Answer:

Name one component/feature of each business environment in the case study

Which statement best summarizes the role of households in the flow of
goods?
A. Households act as consumers for goods made by businesses.
B. Households provide natural resources to businesses.
O C. Households trade goods between product and resource markets.
D. Households sell products created in product markets.

Answers

Answer:

A. Households act as consumers for goods made by businesses.

Explanation:

The statement that best summarizes the role of households in the flow of goods is Households act as consumers of goods made by businesses. The correct option is A.

In the circular flow model of economics, households are a key component in the flow of goods and services. Households provide labor and other resources to businesses in exchange for wages and other forms of income. They then use that income to purchase goods and services produced by businesses, which helps to sustain economic activity.

In this model, businesses are the primary producers of goods and services, and households act as consumers of those goods and services.

Therefore, option A, "Households act as consumers for goods made by businesses," best summarizes the role of households in the flow of goods.

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What could be an industry I could choose because I’m really confused with this whole thing !!! Please help (this is photography but I put business)

What could be an industry I could choose because Im really confused with this whole thing !!! Please

Answers

You could do the fashion industry and talk about labor issues like child labor.

Suppose a particular labor market were in market-clearing equilibrium. What could happen to cause the equilibrium wage to fall? Suppose price levels were rising each year, but money wages were "sticky downward" and never fell; how would real wages in this market adjust?

Answers

There are several factors that could cause the equilibrium wage in a labor market to fall:

Increase in labor supply: If there is an increase in the number of available workers or an increase in the labor force participation rate, it can lead to an excess supply of labor. This increased competition among workers can drive down wages.Decrease in labor demand: If there is a decrease in demand for the goods or services produced by the labor market, firms may reduce their workforce or decrease the number of hours worked. This reduction in demand for labor can result in lower wages.Technological advancements: Technological advancements can lead to increased productivity, allowing firms to produce the same output with fewer workers. This can create an oversupply of labor, leading to a decline in wages.Changes in government policies: Government policies such as changes in minimum wage laws, labor regulations, or taxation can affect labor costs for employers. If these policies increase the costs of employing workers, firms may respond by reducing wages.

Regarding the second part of the question, if price levels are rising but money wages are sticky downward and do not decrease, it means that nominal wages remain constant. In this case, real wages, which are adjusted for inflation, would decrease.

As prices rise, the purchasing power of workers' wages diminishes, resulting in a decline in real wages. This can lead to a decrease in the standard of living for workers as their wages fail to keep up with the increasing cost of goods and services.

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I need some help please

I need some help please

Answers

Steps of the Writing Process:

PrewritingResearchDraftingRevisingEditing and Proofreading.

The set of steps authors follow to create a final product is known as the writing process. The writing process has been characterized in a variety of ways by authors, teachers, and theorists, but it often involves prewriting, writing, and post-writing chores. The procedures that most authors follow to produce a polished piece of writing are referred to as the writing process.

Prewriting activities like brainstorming and planning are followed by drafting, revision for content, editing for mechanics, and publication. Writing, however, is more than just a process; it also serves as a gauge of your knowledge and your level of thinking, therefore the process must pause at key stages to allow for measurement.

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Terrance lives in an area that is expensive, but he does not want to move. When looking at a career, what should Terrance consider? He should choose a career cluster that will allow him to support himself. He should pick a career that speaks to his heart and worry about the finances later. He should ask his family to help support him. He should not worry because he can dictate how much money he will earn.

Answers

Answer:

He should choose a career cluster that will allow him to support himself.

Explanation:

Ben has a quasilinear utility function (1, 2 ) = 610.5 + 2 and a budget constraint = p11 + p22.
1. What is Ben’s optimal 1 and 2? What can we say about the two quantities? Explain.
2. If p1 = p2, how much income does Ben need for his optimal choice? Explain.
3. Using your answer in (b) and a diagram, explain the concept of revealed preference.
4. Suppose that Ben’s budget constraint is now non-linear. Using a diagram and your own example, explain one reason that his budget constraint is non-linear and whether Ben is worse off.

Answers

1. Ben's optimal consumption of good 1 and 2 occurs when the marginal utility per dollar spent on each good is equal. 2. If p1 = p2, Ben will split his income evenly between the two goods, because his utility function indicates that he gains twice as much utility from good 2 as good 1. 3. Revealed preference says that if Ben chooses bundle A over B when both are affordable, he prefers A. 4. If Ben's budget constraint is nonlinear, it could be due to price discounts or taxes.

The concept of revealed preference suggests that his optimal choice reveals his preference over the goods.

A more detailed analysis: Given Ben's utility function, he has a stronger preference for good 2, as it is multiplied by 2. If p1 equals p2, his optimal choice would likely be skewed towards good 2, depending on his income level. Revealed preference theory posits that Ben's consumption choices reveal his preferences for the goods. If Ben's budget constraint is non-linear, it could be due to factors like quantity discounts or taxation. It could make Ben better or worse off, depending on how it aligns with his preferences.

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what is the benefit of filing a tax return even if you didn’t meet the minimum income requirement?

Answers

If you had taxes deducted from your paychecks or other payments but didn't owe any tax at the end of the year, completing a return may enable you to get a tax refund. Additionally, you could be qualified for some refundable tax credits, such as the Earned Income Tax Credit (EITC), that might result in a return for you.

In order to pay taxes or obtain a refund if you overpaid taxes, you must file a tax return. Typically, you will get notice from the Tax and Customs Administration in the form of a preliminary assessment.

You could still need to file a tax return even if the Tax and Customs Administration hasn't handed you a provisional assessment. Using the income tax return tool from the Tax and Customs Administration, you may establish whether you owe tax or if, if either, you're entitled to a refund and how much.

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Why Fuyao glass factory lost money and lost union (American
factory)?
what wa team change problem?

Answers

The reasons behind Fuyao glass factory losing money and the loss of the union in the American factory could be attributed to several factors. One key factor is the team change problem. When Fuyao acquired the American factory, there may have been challenges in effectively integrating the existing workforce with Fuyao's management style and corporate culture.

Team change problems can arise due to cultural differences, communication gaps, resistance to change, lack of employee engagement, or ineffective leadership. These issues can result in decreased productivity, lower employee morale, increased conflicts, and ultimately financial losses.

In the case of Fuyao, if there were difficulties in effectively managing the transition and fostering collaboration between the new management and the existing workforce, it could have led to disruptions in production, decreased efficiency, and increased costs. Additionally, if the management failed to address employee concerns, respect workers' rights, or provide a conducive working environment, it may have contributed to the loss of the union.

Resolving team change problems requires effective change management strategies, open communication, employee involvement, training programs, and a supportive work culture. It is crucial for organizations to recognize and address these issues proactively to ensure a smooth transition and maintain a productive and harmonious work environment.

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When trying to assess whether an applicant will be a good performer, managers utilize interviews, background information, paper-and-pencil tests, and references, which are known as _____

Answers

When trying to assess whether an applicant will be a good performer, managers utilize Selection Tools.

What selection tools?

Selection is the process that managers in all organizations use to determine:

The qualifications of job applicants. Their performance potential.

The known selection tools include:

Paper-and-pencil testsPhysical abilities testPerformance testsBackground informationInterviewsReferences.

Thus, when trying to assess whether an applicant will be a good performer, managers utilize interviews, background information, paper-and-pencil tests, and references, which are known as Selection Tools.

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Please comment on the opinion ""outsourcing simply should not occur because it is unethical to lay off productive and loyal workers just to save some money"". Or What if it was your job (or your parent’s job) being outsourced?

Answers

The opinion expressed is that outsourcing should not occur because laying off productive and loyal workers is unethical to save money. Outsourcing refers to reducing costs.



When considering this opinion, it is important to note that the ethical implications of outsourcing can vary depending on the specific circumstances and perspectives involved. While some argue that outsourcing can lead to the loss of jobs and negatively impact local economies, others believe it can lead to greater efficiency and economic benefits in the long run.

In the case of a job being outsourced, it can be challenging for the affected individual or their family. Losing a job due to outsourcing can have financial and emotional consequences. However, it is also important to acknowledge that outsourcing decisions are typically made based on business considerations such as cost savings and competitiveness in the global market.

When discussing this topic, it is essential to approach the conversation with empathy and respect for differing opinions. It is valuable to consider the broader economic implications and explore potential solutions, such as retraining and providing support for affected workers, to mitigate the negative impacts of outsourcing.

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What percentage of questions did Owen answer correctly on the final exam? True or false. A media plan focuses on determining the best way to deliver an advertising message. a Youth Organization Clapton nickels and dimes for a charity drive by the end of the first day drive that you had collected $46.55 if there were three times as many dimes nickels how many of each type of coin was collected 2.(O.01)Ethan made this model to show the processes which resulted in the formation of oceans.Art shows six boxes connected with arrows. The label on the first box is 'Segments of Earths crust move', second box is 'Earths crust formed', third box is 'Water fills the basins', fourth box is 'Sea floor spreading', fifth box is 'Earth plates meet', and sixth box is 'Crusts either broken down or formed'.Which of these statements best describes a flaw in Ethan's model? 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