Explain the impact a constant dividend yield would have on the price of a call option
What will be an ideal response?
The impact of a dividend will be to reduce the price of the option. Stocks which are ex-dividend tend to decline in price, thus reducing the intrinsic value of call options and the resulting option prices.
You might also like to view...
Batch-level activities are performed each time a batch of goods is processed. The cost of a batch-level activity does not depend on the number of units in the batch.
Answer the following statement true (T) or false (F)
According to the textbook, which of the following behaviors does not tend to be favored by women in leadership roles?
a. consensus b. decisiveness c. collaboration d. relationship-building
Court Corporation purchased supplies at a cost of $24,000 during 2012. At January 1, 2012, supplies on hand were $2,000. At December 31, 2012, supplies on hand are $2,100. Calculate supplies expense for 2012
A) $24,000 B) $23,900 C) $24,100 D) $28,100
Only a holder in due course can legally negotiate commercial paper
Indicate whether the statement is true or false