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Arisa [49]
2 years ago
14

Rosa purchased three call option contracts on ABC stock with a strike price of $27 when the option premium was quoted at $1.1. T

he option expires today when ABC stock price is $29 at the market. She pays $10 as trading costs in total. What is the net profit on this investment?
Business
1 answer:
IrinaK [193]2 years ago
8 0

Answer:

Explanation:

Profit on a long call option = max(St - X, 0) - premium paid  

Profit on a long call option = max(29 - 27, 0) - 1.1

Profit on a long call option = max(2, 0) - 1.1

Profit on a long call option = 2 - 1.1

Profit on a long call option = 0.9 per share

Total profit on the long call option = 0.9 * 100 shares per contract * 3 contracts  = 0.9 * 100 * 3  = $270

Net profit on this investment = 270 - 10

Net profit on this investment = $260

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When the first Pizza Hut opened its doors back in 1958, it offered consumers one style of pizza: its Original Thin Crust Pizza.
slega [8]

Answer:

<u>Monopolist competition</u>.

Explanation:

The market structure of monopolistic competition occurs when there are several companies offering similar products, which even though substitute products cannot be considered perfect substitutes. Monopolistic competition is characterized when in the market there are many sellers competing for a higher market position of some product or sector. This type of monopolistic competition is characterized by free entry to other companies, which makes it increasingly competitive in the pursuit of customer preference.

5 0
2 years ago
Further From Center has 10,700 shares of common stock outstanding at a price of $41 per share. It also has 240 shares of preferr
DanielleElmas [232]

Answer:

capital structure weight is = 0.349

Explanation:

Given data:

Number of share 10,700

per share price is $41

number of share of stock is 240

per share price of preferred stock is $92

number of bonds 570

coupon rate is 6% paid semiannually

mutuarity life of bonds is 22 year

face value of bonds is $1000

selling price 104.5% per par

common stock = 10,700 \times $41 = 438,700

Preferred stock  = 240\times 92 = 222,080

Bonds = 570\times 1000\times 1.045  = 595,650

Total amount = 438,700 + 222,080+595,650 = 1,256,430

capital structure weight is = \frac{438,700}{1,256,430} = 0.349

8 0
2 years ago
Pat used to work as an aerobics instructor at the local gym earning $35,000 a year. Pat quit that job and started working as a p
Ivan

Answer:

$34,000

Explanation:

Accounting profit = Total revenue - Explicit costs

i.e Total revenue = $50,000

     Explicit costs = $12,000 + $1,000 + $3,000 = $16,000

Therefore; $50,000 - $16,000 = $34,000.

6 0
2 years ago
When fashion fair cosmetics offers marketing assistance to resellers that buy its products, it is engaging in what type of promo
PIT_PIT [208]
When fashion fair cosmetics offers marketing assistance to resellers that buy its products, the promotional technique used is called the Push Sales Strategy. It is a technique where the manufacturers would "push" the products to the market by the supply chain to the consumer. These manufacturers are termed as wholesalers while the bridge to the consumers are called the retailers. With this type of strategy, incentives are being given to the retailers to motivate them of purchasing. Incentives can be discounts, premiums, buy-back guarantees and services like from the statement, marketing assistance. The other strategy is called the pull sales strategy where the manufacturer would make the consumers interested in their products.
3 0
2 years ago
Montana Mining Co. (MMC) paid $200 million for the right to explore and extract rare metals from land owned by the state of Mont
N76 [4]

Answer:

$14.7million

Explanation:

Amount paid by MMC: $200M

Cost incurred by MMC :$60M

Risk free interest rate : 7%

Let's first find the expected cash out flow.

We have:

($10,000,000*0.6)+($30,000,000*0.4)

= $18,000,000

At a credit-adjusted discount rate of 7% and expected cashflow after 3 years is $18million. At the beginning of the extraction, the total amount capitalized by MMC will be:

18,000,000*(7%, 3years)

18,000,000*0.81630

= $14,693,400

=> $14.7 million

3 0
2 years ago
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