Which of the following is true for American options?
A. Put-call parity provides an upper and a lower bound for the difference between call and put prices
B. Put call parity provides an upper bound but no lower bound for the difference between call and put prices
C. Put call parity provides a lower bound but no upper bound for the difference between call and put prices
D. There are no put-call parity results
A
Put call parity provides both an upper and a lower bound for the difference between call and put prices. See equation (11.11).
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Arch Associates reports the following comparative balance sheets and income statement information. Arch Associates Comparative Balance Sheets 12/31/Year 1 12/31/Year 2 Cash $12,000 $22,000 Accounts receivable 4,000 8,000 Prepaid insurance 10,000 8,000 Inventory 6,000 2,000 Property, plant and equipment 12,000 10,000 Total assets $44,000 $50,000 Accounts payable $8,000 $12,000 Salaries payable 10,000 4,000 Long term notes payable 8,000 6,000 Stockholders' equity 18,000 28,000 Total liabilities and equity $44,000 $50,000 Income StatementYear Ended 12/31/Year 2Revenue$70,000 Cost of goods sold 40,000 Gross margin 30,000 Operating expense 20,000 Net
income$10,000 All inventory purchases are made on account. The amount of cash paid for inventory purchases during Year 2 was: A. $36,000. B. $40,000. C. $32,000. D. $22,000.
The entrepreneur's market knowledge is deeper than the knowledge that could be gained through market research.
Answer the following statement true (T) or false (F)
A company's warehouse contents were destroyed by a flood on September 12. The following information was the only information that was salvaged: 1. Inventory, beginning: $28,700 2. Purchases for the period: $17,700 3. Sales for the period: $55,700 4. Sales returns for the period: $770 The company's average gross profit ratio is 33%. What is the estimated cost of the lost inventory?
A. $31,088.00. B. $28,273.10. C. $46,400.00. D. $9596.90. E. $45,400.00.
Lucky loses in a high-stakes poker game to Fat Chance. To pay his debt, Lucky writes a check to Fat Chance, who negotiates the check to Convenient, who then tries to cash the check at Lucky's bank. Lucky has already stopped payment on the check, so the check is not honored by her bank. Convenient then tries to collect the check by suing Lucky. High-stakes poker games are illegal in this state
Which statement is correct? a. If Convenient can demonstrate that he is a holder in due course, he will prevail. b. If Convenient can demonstrate that he was a buyer in the ordinary course of business, he will prevail. c. If Convenient can demonstrate that he gave value without notice, he will prevail. d. Convenient will not prevail.