1. You are asked to price options on KYC stock. KYC’s stock price can go up by 15 percent every year, or down by 10 percent. Both outcomes are equally likely. KYC does not pay dividend. The risk free rate is 5% (EAR), and the current stock price of KYC is $100.

1. Price a European put option on KYC with maturity of 2 years and a strike price of 100.
2. Given the price of the put option that you calculated in a), specify the ranges of KYC share price at the option’s maturity date for which you will be making a net profit.
3. What is the price of the Call option at the same strike price?
4. Suppose you expect the price of KYC stock to have little variance in the future. How would you design a strategy (using options) to take advantage of this? Show your strategy explicitly. What are the payoffs of your strategy? What is the range in which you will make profits?

The operations manager at an electronics company believes that the time required for workers to build a circuit board is not necessarily proportional to the number of parts that go onto the board. She has collected data on the time (in minutes) it takes a worker to build a board and the number of parts installed. The data is in a worksheet names Circuits.   Data-1.xlsx

1. Estimate a regression line to predict time based on the number of parts.  What is the Coefficient of Determination of the simple regression? (enter as a decimal)

3. What is the standard error of the estimate of the simple regression?

4. What is the predicted time to build a circuit board with 50 parts?

5. Estimate a quadratic regression line to predict time based on the number of parts and the number of parts squared. What is the Coefficient of Determination of the quadratic model? (enter as a decimal)

6.What is the standard error of the estimate of the quadratic model?

7.

Which model is better, the simple regression or the quadratic?

Group of answer choices

a.Simple because the MSR is larger.

b. Simple because the t-statistic of Parts is much higher.

c.Quadratic because standard error is lower and adj-R² is higher.

d. Quadratic because it has two variables instead of one.

Evaluate the following statement: In the short run, information about a perfectly competitive firm’s fixed costs is needed to determine both the profit-maximizing level of output and the amount of profit earned when producing that level of output. Provide an example of companies that illustrate the discussion. I specifically need the example

How would you evaluate the cost and benefit of college education in economic terms? What explains the rising demand for college education? Under the current unique circumstance of COVID-19, what do you see or expect to see the change in the demand for college education?

Define Social Entrepreneurship/Social Enterprise - List Several in the Seattle Area and discuss their impact.

How artists people love their job more than anything else? explain with example

In times of global changes in climate and economy the point of view to waste as a resource shows a lot of ways of recovery. Point out the difference between recovering and recycling and discuss economic facts and efforts, social impacts as well as environmental issues and development in law and security. Discuss two examples for the relationship between recovering and recycling of plastic products and explain your achievements.

What does the slope of the yield curve tell us? Suppose that economy is in recession and monetary authority decreases policy rate (interest rate) to return output to its potential level. Illustrate using relevant graphs when the yield curve is i) approximately horizontal ii) downward sloping (Hint: Use expectations augmented I S - LM model) .

Assignment Task Three

a) A taxpayer received a lump sum of $91,333 on redemption of a fixed deposit. This represented the original principal of $80,000 and interest for the previous year of $3,000. This interest was rolled over with the principal and invested for another 12 months. The remaining $8,333 was the interest accrued on this total of $83,000.

b) A taxpayer lent a friend $10,000. Interest was payable at 10% p.a. The friend paid the taxpayer $1,000 by cheque on 30 June CY which was not deposited in the taxpayer's bank account until 15 July of the following financial year.

c) Taxpayer's employer had a cash flow problem in the previous financial year and could not pay her all her salary. $9,000 of last year's salary was paid in the current year in addition to this year's salary of $55,000.

d) An employee received the sum of $1,600 on 13 June CY being in respect of 5-week long service leave commencing 30 June CY. The employee intended to return to work at the end of the period of leave. Would your answer be different if the leave commenced on 1 July the following year?

e) A landlord receives rent in advance from his tenants. Actual receipts for this financial year were $3,800 of which $250 was in respect of the month of July of the following year. An amount of $200 was received during the previous year in respect of the month of July CY.

----Required Indicate if assessable income has been derived and when it was derived in the above situations.

Define Marshall-Lerner condition and J-curve. Explain the relation between the two concepts.

Define Marshall-Lerner condition and J-curve.Explain the relation between the two concepts (25 pts.)

Assignment Task Two (300 words - 7 marks)

The coronavirus intervened Australia in early 2020.

On 12 May, the Morrison government issued an unprecedented progress report on the delayed budget, outlining the coronavirus pounding to the national economy and the huge outlay to deal with the pandemic.

What were the main issues presented? How do you think they would affect the economy, social and employment situation in the near future?

Examine the effects of a decrease in foreign output and foreign interest rate under

flexible

-

exchange rate regime when the goal of the central bank is to achi

eve output

stability

(Hint: Use Mundell

-

Fleming model)

.

What happens to the components of

demand?