A speculator can choose between buying 100 shares of a stock for $40 per share and buying 1000 European call options on the stock with a strike price of $45 for $4 per option
For second alternative to give a better outcome at the option maturity, the stock price must be above
A. $45
B. $46
C. $55
D. $50
D
When the stock price is $50 the first alternative leads to a position in the stock worth 100×50 or $5000 . The second alternative leads to a payoff from the options of 1000×(50?45) or $5000 . Both alternatives cost $4000 . It follows that the alternatives are equally profitable when the stock price is $50 . For stock prices above $50 the option alternative is more profitable.
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The post-closing trial balance will contain only temporary accounts
Indicate whether the statement is true or false
Which of the following is NOT a marketing field?
A) supply-channel management B) accounting C) brand management D) advertising E) new product planning
The setup cost to make a carpet is $20 per setup. The holding cost is $2.00 per yard per year, and the annual demand is 12,000 yards. The manufacturing facility operates 300 days, and 120 yards of the carpet are produced per day. Given this information, which of the following statements is true?
a. The maximum inventory is 600. b. The maximum inventory is 500. c. The maximum inventory is 400. d. The maximum inventory is 300.
Sathre Corporation is an oil well service company that measures its output by the number of wells serviced. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes. Fixed Element per MonthVariable Element per Well ServicedRevenue $4,500Employee salaries and wages$56,400 $900Servicing materials $700Other expenses$35,400 ?When the company prepared its planning budget at the beginning of December, it assumed that 34 wells would have been serviced. However, 32 wells were actually serviced during December.?The "Employee salaries and wages" in the flexible budget for December would have been closest to:
A. $89,888 B. $85,200 C. $87,000 D. $84,600