Suppose the price of a share of IBM stock is $200. An April call option on IBM stock has a premium of $5 and an exercise price of $200. Ignoring commissions, the holder of the call option will earn a profit if the price of the share
A. increases to $206.
B. decreases to $196.
C. increases to $204.
D. decreases to $190.
E. None of the options are correct.
Answer: A
You might also like to view...
Bruce is a college chemistry major who has been invited to give a presentation for his younger brother’s high school chemistry class about what it is like to major in chemistry. He is asked to prepare about 10 minutes of information, but when he gets to the class, he is told the teacher is sick and there is a sub in charge. The sub asks if he can stretch his presentation to take up at least 30 minutes. What should Bruce do?
What will be an ideal response?
Describe the production mix linear programming application
What will be an ideal response?
Markham Industries is studying the profitability of a change in operation and has gathered the following information: Current Operation Anticipated OperationFixed costs$38,000 $48,000 Selling price$16 $22 Variable costs$10 $12 Sales (units) 9,000 6,000 Should Markham Industries make the change?
A. No, because the company will be worse off by $22,000. B. Yes, the company will be better off by $6,000. C. No, because sales will drop by 3,000 units. D. No, because the company will be worse off by $4,000. E. It is impossible to judge because additional information is needed.
Which of the five steps to consumer decision making includes shoppers comparing prices, checking for deals, and considering the opinions of others?
a. Problem recognition. b. Information search. c. Alternative evaluation. d. Purchase. e. Post-purchase evaluation.