The following information is for an Apple option (Expires 1/15/2021):
Strike Price: 320.00
Last Price: 187.60
Bid: 183.40
Ask: 185.25
Suppose you buy this option. What is the price that you pay? If the stock price on Jan 15th, 2021 is $325, will you exercise your call? What is the profit on your position?
If the stock price on Jan 15th, 2021 is $315, will you exercise your call? What is your payoff on your position?
In: Finance
XYZ stock price and dividend history are as follows:
| Year | Beginning-of-Year Price | Dividend Paid at Year-End | ||||||
| 2015 | $ | 120 | $ | 2 | ||||
| 2016 | 129 | 2 | ||||||
| 2017 | 115 | 2 | ||||||
| 2018 | 120 | 2 | ||||||
An investor buys six shares of XYZ at the beginning of 2015, buys another two shares at the beginning of 2016, sells one share at the beginning of 2017, and sells all seven remaining shares at the beginning of 2018.
a. What are the arithmetic and geometric average
time-weighted rates of return for the investor? (Do not
round intermediate calculations. Round your answers to 2 decimal
places.)
b-1. Prepare a chart of cash flows for the four
dates corresponding to the turns of the year for January 1, 2015,
to January 1, 2018. (Negative amounts should be indicated
by a minus sign.)
b-2. What is the dollar-weighted rate of return?
(Hint: If your calculator cannot calculate internal rate
of return, you will have to use a spreadsheet or trial and
error.)
In: Finance
Assume that output is given by Q(L,K)=50L^0.5K^0.5 with price of labour L = w and price of capital K = r
|
a |
Use the primal formulation of minimising costs to obtain the demand for Labour L and capital K |
2 |
|
b |
Using the values of L & K obtained above, verify whether the output Q equals the one given in the question by eliminating the values of w and r. Are the primal and dual problems leading to the same answer? |
2 |
|
c |
What is the total cost for producing Q? |
1 |
|
d |
What is the average and marginal cost for producing Q? |
1 |
|
e |
If capital in the short run is fixed at Kwhat is the short-run total cost? |
1 |
|
f |
Write the values for the derivatives of the Total cost with respect to w and r. Does Shephard’s lemma hold in this case? |
1 |
In: Economics
Cross Price Elasticity of Demand:
How can we use cross price elasticity to determine whether two goods are substitutes or compliments?
In: Economics
XYZ's stock price and dividend history are as follows:
| Year | Beginning-of-Year Price | Dividend Paid at Year-End | |||||||||
| 2016 | $ | 185 | $ | 6 | |||||||
| 2017 | 195 | 6 | |||||||||
| 2018 | 170 | 6 | |||||||||
| 2019 | 185 | 6 | |||||||||
An investor buys three shares of XYZ at the beginning of 2016, buys another two shares at the beginning of 2017, sells one share at the beginning of 2018, and sells all four remaining shares at the beginning of 2019.
a. What are the arithmetic and geometric average time-weighted rates of return for the investor? (Round your year-by-year rates of return and final answer to 2 decimal places. Do not round other calculations.)
b. What is the dollar-weighted rate of return? (Hint: Carefully prepare a chart of cash flows for the four dates corresponding to the turns of the year for January 1, 2016, to January 1, 2019. If your calculator cannot calculate internal rate of return, you will have to use trial and error.) (Round your answers to 4 decimal places. Negative amount should be indicated by a minus sign.)
In: Finance
You have the following stock price information of firm XYZ. (4pts)
|
Period (t) |
XYZ Stock Price per share ($) |
|
0 |
2.50 |
|
1 |
2.70 |
|
2 |
2.66 |
|
3 |
2.43 |
|
4 |
2.57 |
|
5 |
2.55 |
|
6 |
2.56 |
|
7 |
2.63 |
|
8 |
2.85 |
|
9 |
2.94 |
|
10 |
2.99 |
a) Calculate the standard deviation for the XYZ stock returns if t=0 indicates the XYZ’s initial public offering (IPO).
b) Calculate the standard deviation for the XYZ stock returns if the given periods (from t=0 to t=10) are some extracted periods from the population (i.e., random sampling).
In: Finance
Problem 7-23 Compute Bond Price (LG7-4)
Calculate the price of a 10.5 percent coupon bond with 10 years left to maturity and a market interest rate of 6.0 percent. (Assume interest payments are semiannual.) (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Is this a discount or premium bond?
Problem 7-24 Compute Bond Price (LG7-4)
Calculate the price of a 5.4 percent coupon bond with 10 years left to maturity and a market interest rate of 9.0 percent. (Assume interest payments are semiannual.) (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Is this a discount or premium bond?
Problem 7-25 Bond Prices and Interest Rate Changes (LG7-5)
A 6.60 percent coupon bond with 10 years left to maturity is priced to offer a yield to maturity of 8.2 percent. You believe that in one year, the yield to maturity will be 8.0 percent. What is the change in price the bond will experience in dollars? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
In: Finance
ABC stock price is $5. Briefly discuss why the price of the new right shares are unlikely to be priced at $4.70.
(b) XYZ Company is making a 1-for-2 rights issue, i.e. an investor who holds 2 shares will be entitled to buy 1 new share. The new rights share will be priced at $3. If XYZ shares traded at $4 the day before the stock went ex-rights.
Calculate the theoretical ex-rights price the next day.
(c) Briefly discuss one advantage of a value-weighted stock index compared to a price-weighted stock index.
(d) Describe two possible reasons for an investor buying an ETF instead of a mutual fund.
In: Accounting
Q 1) explain the short-run break-even price as well as shut-down price for a competitive firm. (2 points)
Q 2) Why is the level of output where marginal revenue equals marginal cost called as the profit-maximizing output under perfect competition? Show your proof. (2 points)
Q 3) Describe the shape of short run supply curve in perfect competition. (2 points)
Q 4) Do you agree that companies under perfect competition as well as monopoly are making profits in the long run? If yes, why? If not, why not? (2 pints)
Q 5) Compare (individual demand curve and marginal revenue curve) under perfect competition and (individual demand curve and marginal revenue curve) under Monopoly. (2 points).
Please answer all five questions, 3-5 sentences each question. (10 possible points)
In: Economics
Gross Margin Percentage = (Unit selling price - COGS)/Unit selling price
Could someone make me an example of using this formula in a word problem, and then show me how to work it out?
Thanks!
In: Accounting