Homework Answers
1. Unrealised gains are taxable as investment sold at a profit are booked in the accounts are taxable.
Hence option (A) is the correct solution.
2. Buying XYZZ put option by investors gives investors an edge to give potential profit than selling short in stock.
Hence option (A) is the correct solution.
3. The correct option is (C).
,4. In the "after hours" trading market, spread between bid and ask is considered wider.
Hence the correct option is (C).
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please answer 4 questions
thank you so much.
Which of the following is taxable in the...
Which of the following describes a position trade? AO Buying a security into inventory directly from...
Which of the following describes a position trade? AO Buying a security into inventory directly from a customer with a mark-down BO After receiving a buy order from a customer, the dealer then purchases the stock into inventory and resels t to the customer CO Simultaneously buying and selling short the same or equivalent security DO Selling stock at the direction of a customer and using the proceeds to buy another stock for that customer
Please show the steps to finding the answer using a *Financial Calculator*! Thank you. 1) The...
Please show the steps to finding the answer using a
*Financial Calculator*! Thank you.
1) The U.S. Treasury issued a 7-year maturity, $1000 par value bond exactly 3 years ago. The bond pays a nominal coupon rate of 12%. The coupon payments are paid semi-annually The most recent coupon payment (the sixth coupon payment) was made yesterday. Your required rate of return from the bond is 10% per year What is the price of the bond today? If the bond...
Please use RStudio to solve this problem, thank you so much in advance. 2. Suppose a...
Please use RStudio to solve this problem, thank you so much in
advance.
2. Suppose a car dealer promotes two options for the purchase of a new $20 000 car. The first option is for the customer to pay up front and receive a $1000 rebate. The second option is “0%-interest financing" where the customer makes 20 monthly payments of $1000 beginning in one month's time. Because of option 1, the effective price of the car is really $19,000, so...
This is the complete question. Please help me answer both questions 1-1 & 1-2. They come...
This is the complete question. Please help me answer both
questions 1-1 & 1-2. They come together. Thank you very
much!!
Q1-1. (Rights to purchase assets) You are interested in buying a stock of Apple in one year. Today, Apple 's stock is traded at $165.24 per share. Suppose that there is something called “Call option”. If you purchase this call option you have a right to purchase the Apple's stock in one-year at $165.24 per share for sure (But...
Suppose you buy 100 shares of Google stock which has a current price of $1,265.13 a...
Suppose you buy 100 shares of Google stock which has a current price of $1,265.13 a share. You want to ensure that you do not lose more than $200 a share. Which of the following option strategies would allow you to do this? A. A covered call B. A naked call C. A protective put D. You cannot ensure that you will not have losses with stocks Suppose I buy 100 shares of AMD and want to limit my losses...
5. You own a call option on the stock with current price So = 4, the...
5. You own a call option on the stock with current price So = 4, the "up factor"u 2, the "down factor" d-1/2, the risk-free interest rater 1/4 and the strike price K = 5, You paid the risk-neutral price of $1.20 for this option, and you want to hedge your position (i.e. reduce your risk) so that you end up with $1.50, (as if you had invested S1.2 at the risk free rate) regardless of whether H or T...
5. You own a call option on the stock with current price So = 4, the...
5. You own a call option on the stock with current price So = 4, the "up factor" u = 2. the ..down factor, d-1/2, the risk-free interest rate r-1/4 and the strike price K-5. You paid the risk-neutral price of $1.20 for this option, and you want to hedge your position (i.e. reduce your risk) so that you end up with $1.50, (as if you had invested $1.2 at the risk free rate) regardless of whether H or T...
5. You own a call option on the stock with current price So = 4, the...
5. You own a call option on the stock with current price So = 4, the "up factor" u = 2. the ..down factor, d-1/2, the risk-free interest rate r-1/4 and the strike price K-5. You paid the risk-neutral price of $1.20 for this option, and you want to hedge your position (i.e. reduce your risk) so that you end up with $1.50, (as if you had invested $1.2 at the risk free rate) regardless of whether H or T...
these four questions are related to one question, so please help me solve these 4!!! Answer...
these four questions are related to one question, so please
help me solve these 4!!!
Answer the next 4 questions using the information in the following table. Fou are considering the purchase of a $1.000 par value Treasury Bill and observe the following quotes for T-Bills in the market: Ignore transaction costs. Time to Maturity Bid Asked (days) % % 60 1.55 1.63 1.54 116 1.62 144 1.61 1.64 88 153 1.52 4. The bid price of a T-bill in...
You own a call option on the stock with current price So-4, the "up factor, u...
You own a call option on the stock with current price So-4, the "up factor, u = 2, the "down factor" d-1/2, the risk-free interest rater-1/4 and the strike price K 5. You paid the risk-neutral price of $1.20 for this option, and you want to hedge your position (i.e. reduce your risk) so that you end up with $1.50, (as if you had invested $1.2 at the risk free rate) regardless of whether H or T occurs. Assume that...
Which of the following describes a position trade? AO Buying a security into inventory directly from a customer with a mark-down BO After receiving a buy order from a customer, the dealer then purchases the stock into inventory and resels t to the customer CO Simultaneously buying and selling short the same or equivalent security DO Selling stock at the direction of a customer and using the proceeds to buy another stock for that customer
Please show the steps to finding the answer using a
*Financial Calculator*! Thank you.
1) The U.S. Treasury issued a 7-year maturity, $1000 par value bond exactly 3 years ago. The bond pays a nominal coupon rate of 12%. The coupon payments are paid semi-annually The most recent coupon payment (the sixth coupon payment) was made yesterday. Your required rate of return from the bond is 10% per year What is the price of the bond today? If the bond...
Please use RStudio to solve this problem, thank you so much in
advance.
2. Suppose a car dealer promotes two options for the purchase of a new $20 000 car. The first option is for the customer to pay up front and receive a $1000 rebate. The second option is “0%-interest financing" where the customer makes 20 monthly payments of $1000 beginning in one month's time. Because of option 1, the effective price of the car is really $19,000, so...
This is the complete question. Please help me answer both
questions 1-1 & 1-2. They come together. Thank you very
much!!
Q1-1. (Rights to purchase assets) You are interested in buying a stock of Apple in one year. Today, Apple 's stock is traded at $165.24 per share. Suppose that there is something called “Call option”. If you purchase this call option you have a right to purchase the Apple's stock in one-year at $165.24 per share for sure (But...
5. You own a call option on the stock with current price So = 4, the "up factor"u 2, the "down factor" d-1/2, the risk-free interest rater 1/4 and the strike price K = 5, You paid the risk-neutral price of $1.20 for this option, and you want to hedge your position (i.e. reduce your risk) so that you end up with $1.50, (as if you had invested S1.2 at the risk free rate) regardless of whether H or T...
5. You own a call option on the stock with current price So = 4, the "up factor" u = 2. the ..down factor, d-1/2, the risk-free interest rate r-1/4 and the strike price K-5. You paid the risk-neutral price of $1.20 for this option, and you want to hedge your position (i.e. reduce your risk) so that you end up with $1.50, (as if you had invested $1.2 at the risk free rate) regardless of whether H or T...
5. You own a call option on the stock with current price So = 4, the "up factor" u = 2. the ..down factor, d-1/2, the risk-free interest rate r-1/4 and the strike price K-5. You paid the risk-neutral price of $1.20 for this option, and you want to hedge your position (i.e. reduce your risk) so that you end up with $1.50, (as if you had invested $1.2 at the risk free rate) regardless of whether H or T...
these four questions are related to one question, so please
help me solve these 4!!!
Answer the next 4 questions using the information in the following table. Fou are considering the purchase of a $1.000 par value Treasury Bill and observe the following quotes for T-Bills in the market: Ignore transaction costs. Time to Maturity Bid Asked (days) % % 60 1.55 1.63 1.54 116 1.62 144 1.61 1.64 88 153 1.52 4. The bid price of a T-bill in...
You own a call option on the stock with current price So-4, the "up factor, u = 2, the "down factor" d-1/2, the risk-free interest rater-1/4 and the strike price K 5. You paid the risk-neutral price of $1.20 for this option, and you want to hedge your position (i.e. reduce your risk) so that you end up with $1.50, (as if you had invested $1.2 at the risk free rate) regardless of whether H or T occurs. Assume that...
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