The department store Engelhorn sold 85 Hugo Boss men’s suits for the regular price of $ 400. For the summer sale, the suits were reduced to $ 200 and 142 were sold. At the final clearance, the price was reduced to $ 100 and the remaining 73 suits were sold. What was the weighted mean price of a Hugo Boss suit? Engelhorn paid $200 a suit for the 300 suits. Comment on the store’s profit per suit if a salesperson receives a $ 25 commission for each one sold.

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A bond has four years to maturity, an 8% annual coupon and a par value of $100. The bond pays a continuously compounded interest of 5%. a. What would the actual percentage change in the price of the bond be if the interest rate goes up from 5% to 6%? b. What would be the percentage change in the price of the bond implied by the duration approximation? c. What would be the percentage change in the price of the bond implied by the duration plus convexity approximation? d. Why does adding the convexity term to the approximation improve it?

A bond has four years to maturity, an 8% annual coupon and a par value of $100. The bond pays a continuously compounded interest of 5%.

a. What would the actual percentage change in the price of the bond be if the interest rate goes up from 5% to 6%?

b. What would be the percentage change in the price of the bond implied by the duration approximation?

c. What would be the percentage change in the price of the bond implied by the duration plus convexity approximation?

d. Why does adding the convexity term to the approximation improve it?

You purchased 800 shares of stock for $49.20 a share. The initial margin requirement is 65 percent and the maintenance margin is 35 percent. What is the lowest the stock price can go before you receive a margin call?

What is the lowest the stock price can go before you receive a margin call if both the initial and maintenance margins are 100%?

What is the lowest the stock price can go before you receive a margin call if both the initial and maintenance margins are 0%?

please show your work

The dollar-value LIFO method was adopted by Blossom Corp. on January 1, 2020. Its inventory on that date was $399,900. On December 31, 2020, the inventory at prices existing on that date amounted to $380,800. The price level at January 1, 2020, was 100, and the price level at December 31, 2020, was 112.

On December 31, 2021, the inventory at prices existing on that date was $421,245, and the price level was 115. Compute the inventory on that date under the dollar-value LIFO method.

3. Refer to the accompanying graph.

1. Suppose the price of an I-phone is $650, calculate the income elasticity of demand for I-phone?

2. Is I-phone a normal good? Explain.

3. Do you expect the cross-price elasticity between I-phones and android phones positive or negative? Explain.

Consider the market for rice. Explain each statement below in 100 words.

(a)  Is the demand for rice relatively elastic or relatively inelastic with respect to the price?

(b)  Is the demand for rice relatively elastic or relatively inelastic with respect to income?

(c)   Is the supply of rice relatively elastic or relatively inelastic with respect to the price?

(d)  Because of the price elasticity of demand for rice, total revenues received by farmers will rise or fall? What about total profits?

(e)   The market is sending a signal to the farmer. What is it telling the farmer to do?

a.

Malmentier SA stock is currently priced at $65, and it does not pay dividends. The instantaneous risk-free rate of return is 7%. The instantaneous standard deviation of Malmentier SA stock is 30%. You want to purchase a put option on this stock with an exercise price of $70 and an expiration date 30 days from now. According to the Black-Scholes OPM, you should hold __________ shares of stock per 100 put options to hedge your risk.

b.

The binomial option price approaches the Black Scholes price when ____________.

1. A trader creates a long strangle with put options with a strike price of $160 per share, and call options with a strike of $170 per share by trading a total of 30 option contracts (15 put contracts and 15 call contracts). Each contract is written on 100 shares of stock. The put option is worth $13 per share, and the call option is worth $11 per share.

   A. What is the value of the strangle at maturity as a function of the then stock price? B. What is the profit of the strangle at maturity as a function of the then stock price?

You are bearish on Telecom and decide to sell short 100 shares at the current market price of $40 per share.

a. How much in cash or securities must you put into your brokerage account if the broker’s initial margin requirement is 50% of the value of the short position?

Initial margin            $

b. How high can the price of the stock go before you get a margin call if the maintenance margin is 30% of the value of the short position? (Round your answer to 2 decimal places.)

Stock price reaches            $