Call option Personal finance problem Carol Krebs is considering buying 100 shares of Sooner​ Products, Inc., at ​$71 per share. Because she has read that the firm will probably soon receive certain large orders from​ abroad, she expects the price of Sooner to increase to​$73 per share. As an​ alternative, Carol is considering the purchase of a call option for 100 shares of Sooner at a strike price of ​$68. The​ 90-day option will cost ​$700. Ignore any brokerage fees or dividends.
a. What will​ Carol's profit be on the stock transaction if its price does rise to ​$73 and she​ sells?
b. How much will Carol earn on the option transaction if the underlying stock price rises to ​$73​?
c. How high must the stock price rise for Carol to break even on the option​ transaction?
d. ​Compare, contrast, and discuss the relative profit and risk associated with the stock and option transactions.

The calculated cost of equity before and after the change in the capital structure are 11.60 percent and 13.30 percent, respectively.

Typically, the capital asset pricing model is used to determine a company's cost of equity or rate of return for shareholders. In this model, the cost of equity is governed by the risk-free rate offered by government securities like treasury bills, the market risk premium, and the stock's beta.

According to the Capital Asset Pricing Model (CAPM), the cost of equity prior to the capital structure change is as follows:

= Risk-free rate minus (beta minus market risk premium) = 5% minus (1.10 minus 6%) = 5% minus 6.60 % = 11.60 % Following the capital structure change, the debt to equity ratio is as follows:

= Debt/Equity Ratio = 30% 70% = 0.43 The levered beta following the capital structure change is as follows:

= Unlevered beta * 1 + (-1) tax rate * debt to equity ratio = 1.10 * (-1) 40% * 0.43 = 1.10 * 1.258 = 1.38 According to the Capital Asset Pricing Model (CAPM), the cost of equity is as follows:

= Sans risk rate + (turned beta * market risk premium)

= 5% + (1.38 * 6%)

= 5% + 8.30%

= 13.30%

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a. The net present value (NPV) of Project 1 over a four-year life, considering the residual value, and assuming a minimum rate of return of 6%, is $10,219.

b. Project 1 has a greater NPV than Project 2, making it the project with the higher net present value.

To calculate the net present value of Project 1, we need to determine the present value of the cash flows and the present value of the residual value. The cash flows of $15,000 per year for 4 years can be treated as an annuity, so we can use the Present Value of an Annuity of $1 at Compound Interest table. Using the table, we find that the present value factor for a 4-year annuity at 6% is 3.465. Multiplying this factor by $15,000 gives us a present value of $51,975 for the cash flows.

The residual value of $76,000 at the end of 4 years needs to be discounted to its present value using the Present Value of $1 at Compound Interest table. Assuming a minimum rate of return of 6%, the present value factor for 4 years is 0.792. Multiplying this factor by $76,000 gives us a present value of $60,192 for the residual value.

Finally, we subtract the initial investment of $89,700 from the present value of the cash flows and the present value of the residual value. $51,975 + $60,192 - $89,700 equals $22,467, but since we are calculating the net present value over a four-year life, we divide this by the present value factor of 0.792 to get the net present value of $10,219.

Comparing the net present values of Project 1 and Project 2, we find that Project 1 has a higher NPV. Therefore, Project 1 provides the greater net present value among the two projects.

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Answer: (1) F, (2) F, (3) T, (4) F, (5) F, (6) T, (7) F, (8) T, (9) F, (10) T

Please check Explanation below for answers to section 2

Explanation: All desires of human beings are known as demand is False.

(1) Demand is the quantity of goods and services that a consumer is "willing" and "able" to buy at a "given price" and at a "particular point in time." Therefore, that someone desires a beautiful house does not constitute demand, but certain conditions must be present and one of such is his ability (that is money) to buy the house.

(2) Demand is inversely related with the income of the consumer is False.

On the contrary, demand is directly related with the income of the consumer, that is, both variables move in the same direction. Simply put, as the income of the consumer rises, his total demand for a commodity or service will also rise, and likewise if the income of a consumer falls, hos total demand for a commodity will also fall or reduce.

(3) Supply is the quantity which is actually brought by the seller to sell in the market is True.

This is the simplest way to put the definition of supply which is defined as the quantity of a commodity that a seller is willing to sell at a given price and at a given point in time.

(4) The stock of perishable goods are similar to the supply quantity is False.

The supply quantity includes the entire stock of goods that the seller or producer is willing to sell regardless of its status (perishable or not).

(5) Demand curve goes upward to the right, to show inverse relationship between price and demand for good is False.

Demand curve actually slopes downward to the right, and this shows an inverse relationship between quantity demanded and price of a commodity. That means, as the demand increases the price reduces, and as the price increases the demand reduces. This follows the law of demand which states that, "other factors being held equal, the higher the price the lower the quantity demanded and, the lower the price the higher the quantity demanded."

(6) When the price of Giffen goods increases, its demand also increases is True.

Giffen goods also known as inferior goods (or staple foods most often) are such that the consumers of such goods usually do not have better alternatives. Hence as the prices of such goods rise the consumer demands equally rise (contrary to the law of demand).

(7) Income elasticity of demand means relationship between price and demand quantity is False.

Income elasticity of demand is the relationship between the consumer income and the quantity demanded, and it measures the rate of response of the quantity demanded in relation to the rate of change in income.

(8) Size of population is also a determinant of demand is True.

The determinants or factors of demand are those that affect the level of demand, and when the population increases the level of quantity demanded will also increase, and vice versa.

(9) Individual demand means all quantity demanded by buyers in the market is False.

Individual demand is clearly distinct from market demand. Market demand is the totality of all the individual demands for a commodity.

(10) Means and willingness are necessary factors to have demand is True.

 Just as explained in number (1) above, demand can only be effective if there is the means (money/resources) and the willingness to make a purchase. If these two conditions are not met, then desire for a commodity alone cannot be termed as demand.

Fill in the blanks by suitable words;

Two major wheels of the economy are Demand and Supply, Supply is the desire from sellers side. The major determinant of demand is Price. The situation when law of demand is not applicable is known as Abnormal demand. Beggar's desire is not regarded as demand, because he may not have ability. When price of one good affects the demand for another good, this situation is known as Substitute goods. Demand is the effective desire backed by Ability and willingness. When price of a good increases, its demand decreases but the supply increases. Those goods which can be consumed alternatively are termed as substitute goods. Inferior or Giffen goods are those good whose demand rises when the income of the consumer decreases.

A December 31, 2017 balance sheet is a financial statement that shows the assets, liabilities, and equity of a company as of that date.

The most accurate and efficient way to prepare this balance sheet would be to use the December 31, 2017 adjusted trial balance. An adjusted trial balance is a report that lists all the accounts and their balances after adjusting entries have been made at the end of an accounting period.This adjusted trial balance provides the most accurate and up-to-date information regarding the financial position of the company, as it includes all the adjusting entries that were made to the accounts. Using the adjusted trial balance to prepare the balance sheet ensures that all the accounts are properly classified and that the financial statements are in compliance with accounting principles.The other options, such as the 2017 general journal, December 31, 2017 trial balance, and December 31, 2017 post-closing trial balance, may not provide the most accurate and complete information needed to prepare a balance sheet.

The general journal is simply a chronological record of all transactions, and the trial balance and post-closing trial balance do not reflect any adjusting entries that may have been made.Therefore, it is recommended to use the December 31, 2017 adjusted trial balance to prepare the December 31, 2017 balance sheet to ensure the accuracy and compliance of the financial statements.

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Answer:

more likely to get approved for a loan.

Explanation:

A credit score is the accepted indicator of one's reliability in paying debts.  In calculating the credit score, a person's credit history is an essential element. If one has been punctual and disciplined in repaying their debts, they are likely to have a high credit score.

Credit score range between 300 and 850. A high score implies the customer is very reliable in repaying debts. Lenders consider individuals with a high credit score as low-risk customers. They are less likely to default on their debts.  For this reason, a customer with a high credit score is highly likely to be approved for a loan.

People's economic decisions and actions are influenced by incentives. Consumers, businesses, employees, savers, investors, and other market participants receive signals from incentives on how to use their limited resources.

Different people can be affected by an incentive in various ways. Because people often act in their own best interests, responses to incentives are predictable. People's behaviors alter predictably in response to changes in incentives.

The economic theory of incentives is a useful framework for deriving explanations of human behavior. Rewards or punishments for behavior are considered incentives. Positive or negative incentives are also possible.

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Answer:

High school. Well at least my high school does.

Explanation:

Answer:

A.

Explanation:

yes

Answer:

A drug store is a type of business that is likely to do well even in an economic recession.

This is because drug stores sell an essential good, that often has a high price, and that is needed by many people, specially those who suffer from chronic diseases.

In other words, people will likely reduce their consumption of many other goods before reducing their consumption of prescription drugs.

Friedman's argument for shareholder primacy is based in the belief that a corporation's primary responsibility is to its shareholders, who have invested their money and therefore have a financial stake in the company's success.

Shareholder primacy is a theory that suggests that the main goal of a corporation should be to maximize shareholder value. This means that the corporation should prioritize the interests of its shareholders over other stakeholders, such as employees, customers, suppliers, and the community in which it operates. He argues that the goal of the corporation should be to maximize profits and increase shareholder value, rather than pursuing social or environmental objectives that may not directly benefit shareholders. This view is often referred to as the "shareholder primacy" model of corporate governance.

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a. Project Q: Payback period is 2.67 years, project R: Payback period is 2.33 years, project P: Payback period is 3.5 years b. Project Q: NPV is RM 5,125.83, Project R: NPV = RM 8,450.31, Project P: NPV = -RM 13,410.47 c. Project R with the highest net present value should be accepted. d. Project R's 2.33-year repayment period is within two years, therefore accept it.

a. Calculation of payback period for each project payback period is a capital budgeting approach that calculates the length of time that a project will take to recuperate the initial investment cost. In general, the payback period is computed as follows:

Payback period = Investment required / Annual cash inflows or Average annual cash inflows

Project Q: Payback period = 80,000/30,000

Payback period = 2.67 years

project R: Payback period = 70,000/30,000

Payback period = 2.33 years

project P: Year Cash Flow P (RM) 0 (90,000) 1 40,000 2 20,000 3 40,000 4 20,000

Investment Required = RM 90,000

Payback period = 2 + ((90,000 - 40,000)/20,000)

Payback period = 3.5 years

b. The calculation of net present value for each project Net present value (NPV) is the difference between the current value of cash inflows and the current value of cash outflows over a certain period of time.

NPV = Sum of the Present Values of Cash Inflows – Sum of the Present Values of Cash Outflows = ∑(Cash inflows ÷ (1 + r)t) – ∑(Cash outflows ÷ (1 + r)t)

Project Q: NPV = -80,000 + (30,000/1.08) + (30,000/1.082) + (30,000/1.083) + (20,000/1.084)

NPV = RM 5,125.83

Project R: NPV = -70,000 + (30,000/1.08) + (20,000/1.082) + (30,000/1.083) + (20,000/1.084)

NPV = RM 8,450.31

Project P: NPV = -90,000 + (40,000/1.08) + (20,000/1.082) + (40,000/1.083) + (20,000/1.084)

NPV = -RM 13,410.47c.

The project with the highest net present value is Project R, so it should be accepted. d. Project R has a payback period of 2.33 years, which is within two years, so it should be accepted.

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Let understand that "short-term investment" are investments that can be easily converted to cash and has a maturity period of less than a year. Example of this investment are Money Market.

"Long term investment" are investment that runs over a long period of time and yield higher return than the short-term investment". Example of these investment are stocks, bonds, real estate

In conclusion, long-term investment has a greater return because it has greater risk.

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Answer:

Compared to short-term investment, what is the general return of long-term investment?

Explanation:

Edge 2022

Product features can be adapted based on different facts. One feature that can be adapted based on how Indian food is prepared is the cooking surface of the cookware component of the product model. Indian cuisine is widely known for its rich spices, flavors, and extensive use of oil and ghee.

As such, the cookware used to prepare such dishes needs to have a high resistance to heat, be non-stick, and easy to clean. In this regard, manufacturers can modify their cookware to have a high-quality non-stick coating that can withstand high temperatures. The coating should be made using materials that do not react with the acidic nature of Indian cuisine, such as ceramic coatings. This would help prevent the food from sticking to the pan, making it easier to cook and clean up after.

The cookware can be made with a thicker bottom to distribute heat evenly and prevent hotspots that may burn the food. The handles can also be designed to remain cool to the touch, making it easy to handle the cookware even when it's hot. By adapting these product features to meet the specific needs of Indian cuisine, manufacturers can attract and retain a loyal customer base. These adaptations can also help differentiate their products from the competition, leading to increased sales and profits.

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Option (b) is FALSE Explanation: With respect to the shareholder/manager relationship, the statement that is FALSE is option (b).

Executive stock options do not have expiration dates and are held in perpetuity. It is incorrect because Executive stock options have an expiration date and are not held in perpetuity. Executive stock options are financial contracts that give the holder the right, but not the obligation, to buy or sell a company's stock at a specified price. The contracts have a specific time frame during which the options can be exercised (usually a few years), after which they expire if they are not used. Options that are not exercised within the specified time frame expire and become worthless. It is incorrect to say that executive stock options do not have an expiration date and are held in perpetuity. Therefore, the answer to the question is option (b).

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Under the U.S. Corporate Sentencing Guidelines, if a firm has developed a strong ethics program, corporate executives found guilty of criminal activity may receive a reduced sentence.

The U.S. Corporate Sentencing Guidelines provide a framework for determining penalties for corporate criminal offenses. One factor taken into consideration is the presence of a strong ethics program within the company. If a firm has implemented such a program, it demonstrates a commitment to ethical conduct and compliance.

In the case of corporate executives found guilty of criminal activity, having a strong ethics program may lead to a more favorable sentencing outcome. The judge may consider the program as a mitigating factor, indicating that the firm has taken steps to prevent misconduct and promote ethical behavior. This could result in a reduced sentence or other favorable considerations in the sentencing process.

It's important to note that the specific impact of a strong ethics program on sentencing can vary depending on the circumstances of the case and the discretion of the judge. However, developing and maintaining a robust ethics program can contribute to a more positive perception by the court and potentially result in a more lenient sentence for corporate executives involved in criminal activities.

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The broker, upon receiving a request from an out-of-state party to manage 15 rental units, should carefully consider the legal and regulatory requirements of providing property management services in that particular state.

Property management is often subject to specific licensing and compliance regulations that vary from state to state. The broker should verify if they hold the necessary licenses or certifications to offer property management services in the out-of-state location. If they do not have the required credentials, they should refrain from providing management services directly.

Alternatively, the broker may consider partnering or collaborating with a licensed property management company in the respective state, allowing them to fulfill the request while maintaining compliance with local laws.

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Answer:

$647.96

Explanation:

Sue the following formula to calculate the price of the bond at the time of sale

Price of Bond = Face value of the bond / ( 1 + Market interest rate )^numbers of years

Where

Face value of bond = $1,000

Market interest rate = 7.5%

Numbers of years = 6 years

placing values in the formula

Price of Bond = $1,000 / ( 1 + 7.5% )^6

Price of Bond = $647.96

Answer:

an office personal is a private office space.so having a private office you have more privacy and this can result in higher productivity if your work requires full concentration.

Explanation:

hope that help

Answer:

Explanation:

A $60,000 increase in investment in subsidiary

The RBF scheme that involves paying women for three prenatal checks is a type of conditional cash transfer. (Option D)

The RBF scheme that involves paying women for three prenatal checks is a type of conditional cash transfer (CCT). This involves making cash transfers to individuals or households based on certain conditions, such as attending prenatal checks or ensuring their children attend school. In this case, women are incentivized to attend prenatal checks by receiving cash transfers upon completion of three visits.

CCTs are a popular RBF scheme used in many low- and middle-income countries to improve maternal and child health outcomes. They have been shown to increase the use of healthcare services, such as prenatal care and vaccinations, and to improve health outcomes, such as reducing maternal and child mortality. CCTs are also seen as a way to address poverty and inequality, as they target transfers to the most vulnerable populations.

However, there are also concerns about the sustainability of CCTs, as they require ongoing funding to maintain the cash transfers. There is also debate about whether CCTs are effective in the long term or if they simply create a dependency on cash transfers. Overall, while CCTs are a promising RBF scheme for improving maternal and child health outcomes, it is important to carefully consider their design and implementation to ensure their effectiveness and sustainability.

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A lobbyist is a person who makes an active effort to persuade a government or council that a certain legislation should be altered or that a certain item should be done.

A lobbyist is a person who has been engaged by a company or a cause to convince politicians to support that company or cause.

To curry favor with politicians, lobbyists are paid. To make things simpler for them, for instance, oil firms send lobbyists to Washington. They may accomplish this by persuasively arguing for their position on occasion, but more frequently, it entails expensive meals and golf outings. That is sneaky, if that makes sense. Bear in mind, however, that organizations dedicated to women's rights and cancer research have lobbyists.

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Answer:

663.58

Explanation:

From the problem:

E, the maximum allowable error, is $100

The value of z for a 99 percent confidence level is 2.576

Estimate of standard deviation is $1,000.

n = [(z x s)/ E] ^ 2

n = [(2.576 x 1000) / 100}^2

= 25.76^2

=663.58

Journal entries are a way to record financial transactions in accounting. Each journal entry consists of at least two parts: a debit and a credit. The debit and credit amounts must always be equal, which is known as the accounting equation of Assets = Liabilities + Equity.

The general journal entries to record the adopted budget at the beginning of the fiscal year would be:

Debit: Estimated Revenues - Taxes $14,900,000

Debit: Estimated Revenues - Intergovernmental Revenues $600,000

Debit: Estimated Revenues - Charges for Services $810,500

Debit: Estimated Revenues - Fines and Forfeits $150,000

Debit: Estimated Revenues - Miscellaneous Revenues $98,200

Credit: Appropriations - General Government $5,400,000

Credit: Appropriations - Public Safety $8,550,000

Credit: Appropriations - Public Works $1,540,000

Credit: Appropriations - Culture and Recreation $960,000

Credit: Appropriations - Miscellaneous $80,000

a-2. The entries in the subsidiary ledger accounts would be:

Subsidiary Ledger - Estimated Revenues:

Taxes: Debit $14,900,000

Intergovernmental Revenues: Debit $600,000

Charges for Services: Debit $810,500

Fines and Forfeits: Debit $150,000

Miscellaneous Revenues: Debit $98,200

Subsidiary Ledger - Appropriations:

General Government: Credit $5,400,000

Public Safety: Credit $8,550,000

Public Works: Credit $1,540,000

Culture and Recreation: Credit $960,000

Miscellaneous: Credit $80,000

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Full Question: During July, the first month f the fiscal year, the Town of Willingdon issued the following purchase orders and contracts.

General Government $800,000

Public Safety $400,000

Public works $75,000

Health and welfare $65,000

Miscellaneous $25,000

Total PO and contracts $1,365,000

Prepare the general journal entry to record the issuance of the POs and contracts.

Then show the entries in subsidiary ledger accounts.

Answer:

IF function

Explanation:

The options to the question are missing; however, I'll assume the question related to Microsoft Office Excel.

To do the task in the question, Nathan can only make use of the IF function.

This is so, because the question relates to conditional statement.

The full if statement is:.

=IF(A1 < B1, "YES","NO")

The company should produce and sell 416 laptops weekly to maximize its weekly profit.

The given computing company's weekly profit function isP(x) = -0.007x³ – 0.1x² + 500x – 700. The number of laptops produced and sold weekly is x units. To maximize the weekly profit of the company, we need to find the value of x at which the profit function P(x) attains its maximum value.

Now, differentiate the given function, we get:P′(x) = (-0.007) * 3x² – 0.1 * 2x + 500= -0.021x² – 0.2x + 500To find the value of x, we set P′(x) = 0 and solve for x.

So,-0.021x² – 0.2x + 500 = 0

Multiplying both sides by -1, we get0.021x² + 0.2x - 500 = 0.

To solve this quadratic equation, we can use the quadratic formula: x = (-b ± √(b² - 4ac)) / 2a where a = 0.021, b = 0.2, and c = -500

Substituting the values of a, b, and c in the above formula, we get: x = (-0.2 ± √(0.2² - 4 * 0.021 * (-500))) / 2 * 0.021≈ 416.1 or -2385.7

Since the number of laptops produced and sold cannot be negative, we take the positive root x = 416.1 (approx.) as the required value.

Therefore, the company should produce and sell 416 laptops weekly to maximize its weekly profit.

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Coverage therapy is a type of psychotherapy that focuses on helping people manage their financial stress and anxiety. One potential strategy that coverage therapy could use to help people avoid financial crisis is to incorporate more savings signal cards. These cards are designed to help people save money by providing visual cues and reminders to save. By placing these cards in strategic locations, such as near a person's credit cards or in their wallet, they can be reminded to save money on a daily basis.

Using savings signal cards can be an effective strategy for preventing financial crisis because it promotes positive financial habits, such as saving money regularly. By consistently saving money, people can build a financial cushion that can help them weather unexpected expenses or financial setbacks. Additionally, savings signal cards can help people develop better financial self-control by providing a visual reminder of their financial goals and priorities. By making saving a more automatic and habitual behavior, people can reduce their reliance on credit and avoid the financial stress that often accompanies debt. Overall, incorporating savings signal cards into coverage therapy could be a simple but effective strategy for promoting financial stability and reducing financial anxiety.

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Marney was participating in a retail transaction. A retail transaction involves the sale of goods or services from a business to a customer for personal or household use.

In this case, Marney purchased a dress from a retail store, which is a common example of a retail transaction. Retail transactions typically take place in physical stores, although they can also occur online or through other channels such as mail-order catalogues. The retail transaction model is widely used in the economy and is an important component of consumer spending, which accounts for a significant portion of economic activity.

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Answer: All supervision activities of RBTs across an organization

Explanation:

A Registered Behavior Technician I someone who that is closely monitored by BCBA when practicing. The RBT is responsible for implementing behavior-analytic services.

RBT Requirements Coordinators are responsible for all supervision activities of RBTs across an organization.

On June 1, 1980, CNN (Cable News Network), the world's first 24-hour television news network, makes its debut. CNN went on to change the notion that news could only be reported at fixed times throughout the day. ...