Walgreen Company (NYSE: WAG) is currently trading at $48.50 on the NYSE. Walgreen Company is also...
Walgreen Company (NYSE: WAG) is currently trading at $48.50 on the NYSE. Walgreen Company is also listed on NASDAQ and assume it is currently trading on NASDAQ at $48.75. Does an arbitrage opportunity exists and if so how would you exploit it and how much would you make on a block trade of 100 shares?
A.) No, no arbitrage opportunity exists.
B.) Yes, buy on NASDAQ and sell on NYSE, make $25.
C.) Yes, buy on NYSE and sell on NASDAQ, make $25.
D.) Yes, buy on NASDAQ and sell on NYSE, make $250.
Homework Answers
Buy low Sell high.
Buy on NYSE ans sell on NASDAQ
Profit = (48.75 - 48.50)* 100 = $25
So, the correct answer is option C Yes, buy on NYSE and sell on NASDAQ, make $25.
Add Answer to:
Walgreen Company (NYSE: WAG) is currently trading at $48.50 on
the NYSE. Walgreen Company is also...
please can you answer question 19-25 19) A bank offers a home buyer a 30-year loan...
please can you answer question 19-25
19) A bank offers a home buyer a 30-year loan at 3.5% per year. If the home buyer borrows $320,000 from the bank, how much must be repaid every year? A) $6.199 B) $10,667 C) $17,399 D) ST14,009 20) Your firm just signed a contract to receive royalty forever. The royalty is estimated to be Simil, every year, starting from next year. If the discount rate is 11%, what is the present value of...
4. Suppose Hewlett-Packard (HPQ) stock is currently trading on the NYSE with a bid price of $28.00 and an ask price of...
4. Suppose Hewlett-Packard (HPQ) stock is currently trading on the NYSE with a bid price of $28.00 and an ask price of $28.10. At the same time, a NASDAQ dealer posts a bid price for HPQ of $27.85 and an ask price of $27.95 (a) Is there an arbitrage opportunity in this case? If so, how would you cxploit it? (b) Suppose the NASDAQ dealer revises his quotes to a bid price of $27.95 and an ask price of $28.05....
2. (10 pts) The initial price of the stock is So 17. A company Not Very Smart Bank Made Solely for The Purposes of This Problem hopes to make money by trading the European call options on this st...
2. (10 pts) The initial price of the stock is So 17. A company Not Very Smart Bank Made Solely for The Purposes of This Problem hopes to make money by trading the European call options on this stock with strikes 14, 26, and 35 and expiration T 20. It has published the following prices for which it is willing to buy and sell the options: Strike Bid Ask 14 4142 26 31 32 35 20 21 Prove that there...
Problem 1 On February 6, 2012, Wal - Mart (WMT) stock was trading at $61.88. The...
Problem 1 On February 6, 2012, Wal - Mart (WMT) stock was trading at $61.88. The stock was expected to rise to $70 by the end of March 2013. On February 6, 2012, a forward dealer offers to sell at $65 and buy at $64 a forward contract on WMT for delivery in one month. On 2/6/2012, you can borrow or lend at a 1 month risk free interest rate of 1.2% (annual percent rate, APR). 1. The forward price...
The following are quotes for several U.S. currency dealers. Dealer A B C D E Japanese...
The following are quotes for several U.S. currency dealers. Dealer A B C D E Japanese yen 109.03 109.06 109.04 109.08 109.06 109.10 109.05 109.07 109.07 109.09 British pounds 1.3115 1.3119 1.3118 1.3120 1.3115 1.3118 1.3116 1.3117 1.3115 1.3118 Inter-dealer arbitrage 1 a. Is there an arbitrage opportunity in Japanese yen? If so, what exchanges should you make to take advantage of it? (Be specific about which dealer you would select, what currency you would buy from or sell to...
Question 1 Assume Alpha Ltd is currently trading on the NYSE with a stock price of $65. The American one-year call option on the stock is trading at $20 with strike price of $65. If the one-year rate...
Question 1 Assume Alpha Ltd is currently trading on the NYSE with a stock price of $65. The American one-year call option on the stock is trading at $20 with strike price of $65. If the one-year rate of interest is 10% p.a. (continuously compounding), is the call price free from arbitrage or is it too cheap/expensive, assuming that the stock pays no dividends? What if the stock pays a dividend of $5 in one year? Question 2 The current...
A 10-month European call option on a stock is currently selling for $5. The stock price...
A 10-month European call option on a stock is currently selling for $5. The stock price is $64, the strike price is $60. The continuously-compounded risk-free interest rate is 5% per annum for all maturities. a) Suppose that the stock pays no dividend in the next ten months, and that the price of a 10-month European put with a strike price of $60 on the same stock is trading at $1. Is there an arbitrage opportunity? If yes, how can...
Littlefeet Companies is currently trading at $43.75 a share. The company has 18,000,000 shares outstanding and...
Littlefeet Companies is currently trading at $43.75 a share. The company has 18,000,000 shares outstanding and earned $36,000,000 last year. It is in the Consumer Retail (Leisurewear) sector - companies in that sector generally trade at a 15.5 P/E multiple. You are in investor that generally invests in companies that are trading at P/E multiples lower then those of their overall sector. Would be likely to buy Littlefeet Companies? Choose the answer with the most accurate description of your answer...
1. A 10-month European call option on a stock is currently selling for $5. The stock...
1. A 10-month European call option on a stock is currently selling for $5. The stock price is $64, the strike price is $60. The continuously-compounded risk-free interest rate is 5% per annum for all maturities. 1) Suppose that the stock pays no dividend in the next ten months, and that the price of a 10-month European put with a strike price of $60 on the same stock is trading at $1. Is there an arbitrage opportunity? If yes, how...
please can you answer question 19-25
19) A bank offers a home buyer a 30-year loan at 3.5% per year. If the home buyer borrows $320,000 from the bank, how much must be repaid every year? A) $6.199 B) $10,667 C) $17,399 D) ST14,009 20) Your firm just signed a contract to receive royalty forever. The royalty is estimated to be Simil, every year, starting from next year. If the discount rate is 11%, what is the present value of...
4. Suppose Hewlett-Packard (HPQ) stock is currently trading on the NYSE with a bid price of $28.00 and an ask price of $28.10. At the same time, a NASDAQ dealer posts a bid price for HPQ of $27.85 and an ask price of $27.95 (a) Is there an arbitrage opportunity in this case? If so, how would you cxploit it? (b) Suppose the NASDAQ dealer revises his quotes to a bid price of $27.95 and an ask price of $28.05....
2. (10 pts) The initial price of the stock is So 17. A company Not Very Smart Bank Made Solely for The Purposes of This Problem hopes to make money by trading the European call options on this stock with strikes 14, 26, and 35 and expiration T 20. It has published the following prices for which it is willing to buy and sell the options: Strike Bid Ask 14 4142 26 31 32 35 20 21 Prove that there...
Most questions answered within 3 hours.
-
What taboo subject did Ida B. Wells suggest was consensual
between black men and white women?...
asked 24 minutes ago -
You have just been hired by the EPA to help with the new gas
mileage standards...
asked 1 hour ago -
4) A firm is hit by increases in its wage rate, w.
a) How does this...
asked 1 hour ago -
A square current loop 5.4 cm on each side carries a 510 mA
current. The loop...
asked 3 hours ago -
What are five tips in conducting knowledge assessment/literature
review research? Each of these tips needs to...
asked 4 hours ago -
Antigen presenting cells link innate and adaptive immune
responses. In the theoretical scenario where phagosomes cannot...
asked 4 hours ago -
Dealing with conflict, in my opinion, is a skill and an art. I
believe that those...
asked 4 hours ago -
6. A long straight wire with circular cross section and radius
1.5 cm carries a 1.2...
asked 5 hours ago -
Deacon Corporation has provided the following financial data
from its balance sheet and income statement:
Year...
asked 5 hours ago -
List and discuss at least three variables from everyday life for
which you expect the variable ...
asked 5 hours ago -
A high-pass filter consists of a 1.60 μF capacitor in series
with a 125 Ω resistor....
asked 5 hours ago -
A newly developed artificial intelligence has trouble
distinguishing hand-written numbers from hand-written alphabets.
There are pictures...
asked 6 hours ago