Reduction in the frequency of different products in the rhythm cycle.
Level loading production, also known as Heijunka, aims to achieve a consistent and balanced production flow by smoothing out the production schedule. It helps in eliminating fluctuations and variations in production volume and mix.
As a result, it brings several benefits such as improved unit fill rate, reduction in changeover time, and reduced operating costs. However, it does not directly lead to a reduction in the frequency of different products in the rhythm cycle. Level loading focuses on creating a stable production rhythm and does not necessarily impact the frequency of different products produced.
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Wayne, Erin, Alan and Kirk are all ex-police officers and have decided to start a private security business. Due to tax and ownership issues and the obvious benefits associated with having limited liability, their lawyer recommends that they should register a company for the business. They agree and instruct their lawyer to register a company to be called WEAK Security Pty Ltd. It is agreed that Wayne, Erin, Alan and Kirk will each be allotted 100 ordinary shares in WEAK Security Pty Ltd. After the company is registered, they decide to employ Rodger as a receptionist in the office. Rodger is given strict instructions that he is not to enter into contracts on behalf of the company.
Wanda works in used car sales and a good friend of Rodger. Rodger tells Wanda about his new position at WEAK Security Pty Ltd . Wanda tells Rodger that she has been trying to sell a truck and it would be perfect for the security business. Wanda shows Rodger the truck and lets him drive it. Rodger agrees that the truck would be a great addition to the security business and thinks the price Wanda is asking is very reasonable. Rodger agrees to buy the truck on behalf of WEAK Security Pty Ltd.
Can Wanda rely on any of the assumptions in section 129 of the Corporations Act in order to enforce the contract against WEAK Security Pty Ltd?
Please use the PIRAC method to analyze the case. Is there any same type of case for referencing? Thankyou!!
Wayne, Erin, Alan and Kirk are all ex-police officers and have decided to start a private security business. Due to tax and ownership issues and the obvious benefits associated with having limited liability, their lawyer recommends that they should register a company for the business.
The PIRAC method to analyze the case of issue is the issue is whether Wanda can rely on any of the assumptions in section 129 of the Corporations Act to enforce the contract against WEAK Security Pty Ltd.
The principle refers to Section 129 of the corporations act deals with the assumption of authority. It states that a person dealing with a company in good faith can assume that the company's officers have the authority to bind the company in transactions within its ordinary course of business.
Application was given strict instructions not to enter into contracts on behalf of WEAK Security Pty Ltd. Therefore, Wanda cannot reasonably assume that Rodger had the authority to bind the company in the purchase of the truck.
Conclusion is Wanda cannot rely on the assumptions in section 129 of the Corporations Act because Rodger exceeded his authority by entering into the contract on behalf of WEAK Security Pty Ltd.
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You expect Commodore Company's stock to pay its next dividend of $6.36 exactly one year from now. After this first dividend, future dividends will grow at -3% for each of the subsequent 2 years and then 5% per year every year thereafter. What is Commodore's intrinsic value today? Use a discount rate of 12.2% and round your answer to the nearest penny.
Athens, Inc has a credit rating of A and wants to issue 15-year bonds at par value. If the 15-year Treasury bond has a YTM of 4.97% and the credit spread for Single A debt over Treasuries is 5.33%, what coupon rate should Athens select? Enter your answer as a decimal and show four decimal places. For example, if your answer is 5.25%, enter .0525.
The bonds are issued at par value, the coupon rate should be set equal to the required yield. Therefore, Athens, Inc should select a coupon rate of 10.30% (or 0.1030 as a decimal) for its bonds.
To calculate Commodore Company's intrinsic value today, we need to determine the present value of its future dividends using the dividend discount model (DDM).
Given information:
First dividend (D₁) = $6.36
Dividend growth rate for the subsequent 2 years (g₁) = -3%
Dividend growth rate after the first 2 years (g₂) = 5%
Discount rate (r) = 12.2%
Step 1: Calculate the present value of the first dividend (D₁):
PV(D₁) = D₁ / (1 + r)¹
PV(D₁) = $6.36 / (1 + 0.122)¹
PV(D₁) = $5.68
Step 2: Calculate the present value of dividends for the subsequent 2 years (D₂ and D₃):
PV(D₂) = D₁ * (1 + g₁) / (1 + r)²
PV(D₂) = $6.36 * (1 - 0.03) / (1 + 0.122)²
PV(D₂) = $5.61
PV(D₃) = D₂ * (1 + g₁) / (1 + r)³
PV(D₃) = $5.61 * (1 - 0.03) / (1 + 0.122)³
PV(D₃) = $5.54
Step 3: Calculate the present value of dividends after the first 2 years (D₄ onwards):
PV(D₄ onwards) = D₃ * (1 + g₂) / (r - g₂)
PV(D₄ onwards) = $5.54 * (1 + 0.05) / (0.122 - 0.05)
PV(D₄ onwards) = $71.72
Step 4: Calculate the intrinsic value by summing up the present values of all dividends:
Intrinsic Value = PV(D₁) + PV(D₂) + PV(D₃) + PV(D₄ onwards)
Intrinsic Value = $5.68 + $5.61 + $5.54 + $71.72
Intrinsic Value = $88.55
Therefore, Commodore Company's intrinsic value today is approximately $88.55.
Now let's move on to the second question:
Athens, Inc wants to issue 15-year bonds at par value. We need to determine the coupon rate for these bonds. The yield to maturity (YTM) for a 15-year Treasury bond is given as 4.97%, and the credit spread for Single A debt over Treasuries is 5.33%.
The required yield for Athens, Inc's bonds would be the sum of the YTM and the credit spread:
Required Yield = YTM + Credit Spread
Required Yield = 4.97% + 5.33%
Required Yield = 10.30%
Since the bonds are issued at par value, the coupon rate should be set equal to the required yield. Therefore, Athens, Inc should select a coupon rate of 10.30% (or 0.1030 as a decimal) for its bonds.
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Question 6.Which of the following statements related to Canadian taxation is correct:A Interest income received by a corporation is tax-free.B Dividend income received by a Canadian corporation from another Canadian company is taxable.C Dividend paid out by a corporation is treated as tax deductible expense.D Interest paid by a corporation is treated as before-tax expense, so it is 100% tax deductible.Question 7. Which of the following items will show a cash inflow (cash flow increase) to the firm:A increase of inventory B. decrease of marketable securities C. increase in accounts receivablesD decrease of borrowings from banksE. increase of fixed assets
The correct option is B. Dividend income received by a Canadian corporation from another Canadian company is taxable.
The option that shows a cash inflow (cash flow increase) to the firm is C. increase in accounts receivables.Explanation for option 6:B. Dividend income received by a Canadian corporation from another Canadian company is taxable.In Canada, dividends received by Canadian corporations from other Canadian companies are subject to taxation. The dividend is taxed at a reduced rate because of the dividend tax credit (DTC). The DTC is a non-refundable tax credit that provides a tax break to Canadian taxpayers who receive dividends from Canadian corporations.
Increase in accounts receivables - An increase in accounts receivable would result in a cash inflow. Accounts receivable (AR) is the money owed to a company for goods or services that have already been delivered. When customers pay their bills, the company receives cash, which is reflected as a cash inflow in the cash flow statement.
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How COVID-19 has affected the Beauty Industry in Bangladesh? Use
economic concepts such as demand, supply, elasticity, and graphs in
explaining your answer.
The COVID-19 pandemic has had a significant impact on the Beauty Industry in Bangladesh. The concept of supply and demand, elasticity, and graphs play a crucial role in explaining how the beauty industry was affected by COVID-19.
The COVID-19 pandemic has changed the way businesses operate worldwide, including the beauty industry in Bangladesh. The beauty industry has been adversely affected by the pandemic, and businesses have been forced to alter their operations and marketing strategies to stay afloat.
The demand for beauty products has decreased significantly due to the COVID-19 pandemic. Bangladesh's beauty industry relied heavily on physical stores to sell their products to customers. When the pandemic hit, the government imposed lockdowns, and people were hesitant to go out, which led to a decrease in demand for beauty products. As a result, many beauty businesses had to close down temporarily or permanently.
The pandemic's impact on the supply chain has also affected the beauty industry. The restrictions and limitations on imports and exports of raw materials have made it challenging for companies to manufacture and produce their products. As a result, the supply of beauty products has been disrupted.
The elasticity of demand has played a crucial role in the beauty industry's downfall during the pandemic. The elasticity of demand refers to how consumers respond to changes in price. During the pandemic, consumers' disposable income decreased, and they became more price-sensitive. Beauty products are considered non-essential, and when people's disposable income decreased, they were less likely to spend money on beauty products.
Graphs can also be used to show the effect of COVID-19 on the beauty industry. For example, a graph that shows the decrease in sales of beauty products before and during the pandemic can provide a visual representation of the industry's decline.
In conclusion, COVID-19 has had a severe impact on the Beauty Industry in Bangladesh. The pandemic has significantly decreased demand for beauty products, disrupted the supply chain, and made consumers more price-sensitive. Beauty businesses have had to adapt to the pandemic's changes and alter their operations to survive.
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If your investment has a return rate of 9.2%, what is the annuity that you will have to invest for the next three years to reach your goal of $28,800 three years from now? O $8,768.55 O $8,242.44 O $8,154.75 O $8,505.49 O $9,470.03
The annual annuity that needs to be invested to reach the goal would be $8,505.49.
The annuity that you will have to invest for the next three years to reach your goal of $28,800 three years from now, if your investment has a return rate of 9.2% would be $8,505.49. Here is the detailed solution below:Given,Future value (FV) = $28,800
Number of years (n) = 3
Return rate (r) = 9.2% An annuity is a series of equal payments made at equal intervals. The present value of an annuity is the sum of each payment's present value for all future payment periods.
The formula for annuity payments is:
PMT = FV ×[tex](r / [1 − (1 + r)−n])[/tex]
PMT = 28800 × (0.092 / [1 − (1 + 0.092)−3])
PMT = 28800 × (0.092 / [1 − (1.092)−3])
PMT = 28800 × (0.092 / [1 − 0.784])
PMT = 28800 × (0.092 / 0.216)
PMT = 12384/3
PMT = $4,128 Now, the annual annuity that needs to be invested to reach the goal would be $8,505.49.
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If you invest $10,000 today and another $10,000 a year from today, what will be the total value of your investments at the end of 10 years from today? Assume that your investments earn a 6% return.
Group of answer choices
$35,816.95
$34,803.27
$17,908.48
$16,894.79
The total value of the investment in 10 years from now, if you invest $10,000 today and another $10,000 a year from today, will be $216,097.12.
In the present case, let us assume that the annual compounding of the investment is done over 10 years, with a 6% return per annum.
In the first year, the investment will grow by 6% of $10,000 = $600. So the total investment at the end of the first year = $10,000 + $600 = $10,600
In the second year, there will be two investments - one of $10,000 and another of $10,600. Both will grow by 6%. Thus the investment at the end of the second year will be: $10,000 x 1.06 + $10,600 x 1.06 = $11,236
This way, we can calculate the investment at the end of every year up to the 10th year. At the end of the 10th year, the total investment will be $216,097.12.
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A system of income inequality has advantages and disadvantages. Which of the following is a characteristic of a country that has income inequality?
Group of answer choices
in a country with higher income inequality the lower income households generally have fewer political advantages (less influence) than the higher income households.
All of the listed choices are characteristics
a country with income inequality generally has a higher average standard of living than a country with pure income equality.
a country with income inequality provides those who are more productive the ability to reap higher rewards and higher incomes. Thus more people tend to be productive and efficient than in a system of income equality.
In a country with higher income inequality, the lower income households generally have fewer political advantages (less influence) than the higher income households. This is a characteristic of income inequality. Higher income households often have more resources and economic power, which can translate into greater political influence and the ability to shape policies that benefit their interests.
Additionally, a country with income inequality provides those who are more productive the ability to reap higher rewards and higher incomes. This characteristic suggests that income inequality allows for greater incentives for individuals to be productive and efficient. In such a system, individuals who contribute more to the economy can earn higher incomes, which can serve as a motivator for increased productivity and economic growth.
However, it is important to note that not all of the listed choices are characteristics of a country with income inequality. The statement "a country with income inequality generally has a higher average standard of living than a country with pure income equality" is not necessarily true. Income inequality does not guarantee a higher average standard of living as it depends on various factors such as social welfare programs, access to education and healthcare, and overall economic conditions. Income equality can also be achieved with a high standard of living if resources are distributed equitably among the population.
Therefore, the correct answer is in a country with higher income inequality, the lower income households generally have fewer political advantages (less influence) than the higher income households.
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Choose the step that is clearly out of order in the following schematic of a documentary credit transaction.
Importer's bank opens a letter of credit
The exporter loads the goods to a ship and obtains a bill of lading
A bill of exchange is accepted by the importer
The exporter receives payment in exchange for the bill of exchange and the bill of lading to the Exporter's bank.
Documents are sent to the importer's bank
Importer's bank collects payment from the importer and hands over the bill of lading
The importer collects the goods from the ship
The step that is clearly out of order in the schematic of a documentary credit transaction is:
The exporter receives payment in exchange for the bill of exchange and the bill of lading from the Exporter's bank.
In a typical documentary credit transaction, the exporter receives payment after the importer's bank collects payment from the importer and hands over the bill of lading. The correct sequence would be:
1. Importer's bank opens a letter of credit.
2. The exporter loads the goods to a ship and obtains a bill of lading.
3. Documents are sent to the importer's bank.
4. Importer's bank collects payment from the importer and hands over the bill of lading.
5. The exporter receives payment in exchange for the bill of exchange and the bill of lading from the Exporter's bank.
6. The importer collects the goods from the ship.
Therefore, the step "The exporter receives payment in exchange for the bill of exchange and the bill of lading to the Exporter's bank" is out of order in the given sequence.
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Question 1 (15 marks) Explain how the four (4) factors of the incentive intensity principle apply to: (i) (5 marks) A linear contract with one agent? (ii) (5 marks) A multitasking linear contract with subjective performance evaluation (SPE)? (iii) (5 marks) A linear contract with two (2) agents and with a relative performance evaluation (RPE)?
The incentive intensity principle aims to ensure that agents put forth the required effort to achieve the goals of the contract.
What are the 4 factors?The four factors of the incentive intensity principle are the sensitivity of the contract to effort, the agent's degree of risk aversion, the degree of substitution between effort and other inputs, and the degree of complementarity between effort and other inputs.
These four factors are applied differently depending on the contract type, as described below:
(i) Linear contract with one agent:
(ii) Multitasking linear contract with subjective performance evaluation (SPE):
(iii) Linear contract with two agents and with a relative performance evaluation (RPE):
The sensitivity of the contract to effort: The greater the sensitivity of the contract to effort, the higher the effort level will be.
The agent's degree of risk aversion: The higher the degree of risk aversion, the lower the agent's effort level.
The degree of substitution between effort and other inputs: The lower the degree of substitution, the higher the effort level.
The degree of complementarity between effort and other inputs: The higher the degree of complementarity, the higher the effort level.
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The spread between the yield on a 2-year corporate bond and the yield on a similar risk-free bond is 250 basis points. The recovery rate is 40%.
i) Estimate the average hazard rate over the 2-year period.
ii) Compute the probability that the company issuing the bond will default in 2 years
The estimated average hazard rate over the 2-year period is approximately 4.17%.
The probability that the company issuing the bond will default in 2 years is approximately 8.34%
i) To estimate the average hazard rate over the 2-year period,
we need to use the spread and the recovery rate.
The hazard rate is the probability of default within a specific time period.
In this case, the spread between the yield on the corporate bond and the risk-free bond is 250 basis points,
which is equivalent to 2.5%. Since the recovery rate is given as 40%, we can assume that the remaining 60% is the probability of default.
To estimate the average hazard rate,
we can divide the spread by the recovery rate:
Average Hazard Rate = Spread / (1 - Recovery Rate)
Average Hazard Rate = 2.5% / (1 - 40%) = 2.5% / 60% = 4.17%
ii) To compute the probability that the company issuing the bond will default in 2 years,
we can use the hazard rate. The hazard rate represents the instantaneous probability of default per year.
The probability of default in 2 years can be calculated by multiplying the hazard rate by the number of years:
Probability of Default in 2 years = Hazard Rate * 2
Using the estimated average hazard rate from part
(i), we can compute the probability of default in 2 years:
Probability of Default in 2 years = 4.17% * 2 = 8.34%
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i) The average hazard rate over the 2-year period 1 is approximately 4.17%
ii) The probability that the company issuing the bond will default in 2 years is approximately 0.0806 or 8.06%.
To estimate the average hazard rate over the 2-year period, we can use the following formula:
i) Average Hazard Rate = (Spread / (1 - Recovery Rate)) / 100
Given that, Spread = 250 basis points = 2.50%
Recovery Rate = 40% = 0.40
Average Hazard Rate = (2.50% / (1 - 0.40)) / 100
Average Hazard Rate = (2.50% / 0.60) / 100
Average Hazard Rate ≈ 4.17%
ii) To compute the probability of default in 2 years, we need to use the following formula:
Probability of Default = 1 - e^(-Average Hazard Rate * Time to Maturity)
Given, Time to Maturity = 2 years
Probability of Default = 1 - e^(-0.0417 * 2)
Probability of Default ≈ 1 - e^(-0.0834)
Probability of Default ≈ 1 - 0.9194
Probability of Default ≈ 0.0806
So, the probability that the company issuing the bond will default in 2 years is approximately 0.0806 or 8.06%.
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The President of the United States semiconductor corporation made this statement in the companies annual report: "United's primary goal is to increase the value of the common stockholders equity overtime". Later in the report the following announcements were made:
A: The company contributed $1.5 million to the symphony orchestra in San Francisco, it’s headquarters city.
B: United is pending $5 million to open a new plant in Mexico. no revenues will be produced by the plant for four years, so earnings will be depressed during this period versus what they would have been had the company not open the new plant.
C: The company is increasing its relative use of debt. Assets were formally financed with 35% debt and 65% equity; henceforth, the financing mix will be 50-50
D. The company uses a great deal of electricity and its manufacturing operations, and it generates most of this power itself. United plans to utilize nuclear fuel rather than coal to produce electricity in the future.
E: The company has been paying out half of its earnings as dividends and retaining the other half. Henceforth, it will pay only 30% as dividends.
These measures were indicative of the company’s commitment not just to the shareholders but also to a broader set of social and environmental responsibilities.
The President of the United States semiconductor corporation's statement in the annual report that “United's primary goal is to increase the value of the common stockholders equity overtime” displayed the focus on the stock price and shareholder value.
To achieve this, the company made a few key announcements that enabled it to not just increase equity value long-term, but also meet its potential socially and environmentally. The first announcement that it contributed $1.5 million to the symphony orchestra in its headquarters city, San Francisco, showed its commitment to meet social and environmental responsibilities and integrate cultural and artistic aspects into its corporate life. This showed that it was aware of its role in the larger community and gave it a public image boost.
The second announcement that it was pending $5 million to open a new plant in Mexico was indicative of its commitment to increase its geographical presence and in turn its market share. Even though the plant will not produce any revenues for a period of four years, this commitment was necessary for the company’s long-term prospects.
The third announcement that the company was increasing its relative use of debt and converting its financing mix from 35/65 debt/equity to a 50/50 ratio reflected an update in its financial strategy. The company was taking on more risk in an effort to increase long-term returns for its stockholders equity. The fourth announcement that United planned to switch from coal to nuclear fuel to produce electricity was in line with its environmental commitments. The company was aware of the energy it was using and was making a conscious decision to switch to an emission-free fuel source.
Finally, the fifth announcement that the company will pay out only 30% of its earnings as dividends rather than 50% showed its focus on financial mobilization for the company’s long-term rewards. This indicated that United was being more strategic with its finances and planning for the future. In conclusion, all of these announcements were aimed at increasing the value of the common stockholders equity for the company in the long run.
Hence, these measures were indicative of the company’s commitment not just to the shareholders but also to a broader set of social and environmental responsibilities.
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Hyperion Inc., currently sells its latest high-speed color printer, the Hyper 500, for $349. It plans to lower the price to $308 next year. Its cost of goods sold for the Hyper 500 is $191 per unit, and this year's sales (at the current price of $349) are expected to be 20,800 units. a. Suppose that if Hyperion drops the price to $308 immediately (rather than waiting one year) it can increase this year's sales by 30% to 27,040 units. What would be the incremental impact on this year's EBIT of such a price drop? b. Suppose that for each printer sold, Hyperion expects additional sales of $95 per year on ink cartridges for the three-year life of the printer, and Hyperion has a gross profit margin of 81% on ink cartridges. What is the incremental impact on EBIT for the next three years of such a price drop?
The incremental impact on this year's EBIT of such a price drop is $1,080,000. The incremental impact on EBIT for the next three years of such a price drop is $1,657,952.
(a) The present EBIT with the current sales of 20,800 units is given by EBIT = $349 × 20,800 – $191 × 20,800 = $3,964,800 – $3,977,280 = −$12,480. If the company lowers its price to $308 and increases its sales by 30% to 27,040 units, then the new revenue and cost are $308 × 27,040 = $8,326,720 and $191 × 27,040 = $5,167,840, respectively. The new EBIT will be $3,158,880. Thus, the incremental impact on this year's EBIT of such a price drop is $3,158,880 − (−$12,480) = $1,080,000.
(b) For each printer sold, Hyperion expects additional sales of $95 per year on ink cartridges for the three-year life of the printer, and Hyperion has a gross profit margin of 81% on ink cartridges. The incremental annual profit from ink cartridges will be $95 × 81% = $76.95. The incremental profit from ink cartridges for the next three years will be $76.95 × 27,040 × 3 = $6,590,752.
Hence, the incremental impact on EBIT for the next three years of such a price drop is $6,590,752 − $1,932,800 = $1,657,952. Therefore, the incremental impact on EBIT for the next three years of such a price drop is $1,657,952.
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"Heart Limited has one bond in issue expiring in eight years, paying 0 coupon and has a face value of $1000. It is currently traded at $720, Beta =1.2, risk free rate is 2%, historic market risk premium is 5.5%. Assume the ratio of debt to equity is 2:1, and corporate tax rate is 20%." (c) Determine the WACC for Heart Limited.
The Weighted Average Cost of Capital (WACC) for Heart Limited is 5.73%.
1. Calculate the cost of equity (Ke):
Ke = Risk-Free Rate + Beta * Market Risk Premium
Ke = 2% + 1.2 * 5.5% = 8.6%
2. Calculate the cost of debt (Kd):
Since the bond pays no coupon and is currently traded at a discount, the yield to maturity (YTM) can be used as the cost of debt.
Given that the bond has a face value of $1000 and is currently traded at $720, the discount is $1000 - $720 = $280.
The YTM can be calculated using the bond's discount and time to maturity:
YTM = (Discount / Purchase Price) * (1 / Time to Maturity)
YTM = ($280 / $720) * (1 / 8) = 0.0486 or 4.86%
3. Calculate the weights of equity (We) and debt (Wd):
Since the debt-to-equity ratio is 2:1, the weights can be calculated as follows:
We = 2 / (2 + 1) = 0.6667 or 66.67%
Wd = 1 / (2 + 1) = 0.3333 or 33.33%
4. Calculate the WACC:
WACC = (We * Ke) + (Wd * Kd)
WACC = (0.6667 * 8.6%) + (0.3333 * 4.86%)
WACC = 5.73%
Therefore, the WACC for Heart Limited is 5.73%.
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Your home insurance policy has a $250 deductible. If a small fire causes $660 damage to your home, what amount of the claim would the insurance compary pay? Muliple Cheice 5455 Not able to detemine trom this ritarmation 5410 1250 8650
If a small fire causes $660 damage to your home and your home insurance policy has a $250 deductible, then the insurance company would pay $410.The deductible is the amount the policyholder must pay out of pocket before the insurance company pays for any damages.
In this case, the deductible is $250, which means the policyholder must pay $250 towards the cost of the damages. After the deductible is paid, the insurance company will cover the remaining amount of the claim up to the policy limit. The calculation for the insurance payment is:$660 (damage to your home) - $250 (deductible) = $410So, the insurance company would pay $410 towards the claim.
Therefore, the correct answer is option 2: Not able to determine from this information.
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8. Ron Corporation had 8 million shares of common stock outstanding during the current calendar year. On July 1, Ron issued ten thousand $1,000 face value, convertible bonds. Each bond is convertible into 50 shares of common stock. The bonds were issued at face amount and pay interest semi annually for 20 years. They have a stated rate of 12%. Jet had income before tax of $24 million and a net income of $18 million. Ron would report the following EPS data (rounded): a. Basic EPS $2.25 Diluted EPS $2.24 b. $2.25 n/a antidilutive c. $2.25 $2.16 d. $2.25 $2.12
Based on the information provided, Ron Corporation would report the following EPS data (rounded):
a. Basic EPS: $2.25
Diluted EPS: $2.24
Basic EPS calculates earnings per share based on the weighted average number of common shares outstanding during the period. In this case, there were 8 million shares outstanding throughout the year.
To calculate diluted EPS, potential common shares from convertible securities need to be considered. Ron issued convertible bond on July 1, which are convertible into 50 shares of common stock each. Since the bonds were issued halfway through the year, the impact on diluted EPS would be proportional.
To calculate the diluted EPS, we need to determine the potential number of shares that would be added if all the bonds were converted. Since each bond is convertible into 50 shares, the total number of potential additional shares is 10,000 bonds * 50 shares/bond = 500,000 shares.
the diluted EPS is calculated by dividing the net income of $18 million by the sum of the weighted average shares outstanding (8 million) and the potential additional shares (500,000), resulting in $2.24.
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You are long a put option with an exercise price of $100. The option expires today and the underlying security is trading at $94. If youpurchased the option for $4, should you exercise the option?a. yes b. no
The net payoff is negative. Hence, it is not advisable to exercise the option. So, the correct is option (b) no.
It is asked whether to exercise the option if the option expires today and the underlying security is trading at $94. We will solve this question step by step below.
Let us first understand the given terms:
Put option: It is an option contract that gives the owner the right, but not the obligation, to sell a specified amount of an underlying asset at a predetermined price within a specified time.
Exercise price: Also called the strike price, it is the price at which an option can be exercised by the owner of the option.
Underlying security: It refers to the asset or security that an option derives its value from. In this case, it is not specified which underlying asset is being used.Let's now solve the question:
Given,
Exercise price = $100
Option premium paid = $4
Underlying security trading at = $94
Now, we have to decide whether to exercise the option or not.
For a put option, it is beneficial to exercise the option if the market price of the underlying asset is less than the exercise price.
In this case, the market price of the underlying asset is $94 which is less than the exercise price of $100.
Hence, it is profitable to exercise the option.
Now, let us calculate the net payoff of the option:
Net Payoff = Market price - Exercise price - Option premium
= $94 - $100 - $4
= -$10
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Describe how a doctoral researcher can justify a chosen research
method in their dissertation?
When justifying a chosen research method in a doctoral dissertation, a researcher needs to provide a robust rationale for their selection. Here are some steps and considerations for justifying a research method:
1. Research Objectives and Questions: Clearly articulate the research objectives and questions that guide the study. Identify the specific information or knowledge the researcher aims to uncover or contribute to the field.
2. Alignment with Research Design: Explain how the chosen research method aligns with the overall research design and is suitable for addressing the research objectives.
3. Epistemological and Theoretical Framework: Describe the epistemological stance and theoretical framework that underpin the research.
4. Methodological Approach: Provide a detailed explanation of the chosen research method, including its key characteristics, procedures, and data collection techniques.
5. Validity and Reliability: Address the issues of validity and reliability associated with the chosen research method. it ensures the reliability of the results, meaning that similar findings would be obtained if the study were conducted under similar conditions.
6. Previous Research and Scholarship: Demonstrate familiarity with existing literature and research in the field. Discuss how the chosen research method has been successfully used in previous studies to investigate similar research questions or phenomena. Reference relevant studies and highlight their findings to support the suitability and effectiveness of the chosen method.
7. Ethical Considerations: Address any ethical considerations associated with the chosen research method, such as informed consent, privacy, confidentiality, and potential harm to participants.
8. Practical Considerations: Discuss any practical considerations related to the chosen research method, such as the availability of resources, time constraints, and feasibility.
9. Limitations and Alternative Approaches: Acknowledge the limitations of the chosen research method and discuss potential alternative methods that could have been considered.
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[Table 1] The dollar amounts that go in blanks (A) and (B) are, respectively
Table-1 Price Quantity Marginal Sold Revenue $10 10
$10 11 (A)
$10 12 (B)
$10 13 (C)
$10 14 (D)
O a $11 and $11 O b. $10 and $10 O C $10 and $11 O d. $11 and $12
The dollar amounts that go in blanks (A) and (B) are $10 and $11, respectively, in Table 1.
In Table 1, the given price per unit is $10. To determine the dollar amounts in blanks (A) and (B), we need to calculate the marginal revenue for each corresponding quantity.
Marginal revenue represents the additional revenue generated from selling one more unit. It is calculated by multiplying the price per unit by the change in quantity.
Given that the initial quantity sold is 10 and the marginal revenue is not provided, we can infer that the next unit sold would have the same price per unit, which is $10. Therefore, the dollar amount in blank (A) is $10.
For blank (B), we observe that the quantity increases to 11. To calculate the marginal revenue for this additional unit, we multiply the price per unit ($10) by the change in quantity (1). Therefore, the dollar amount in blank (B) is $11.
Hence, the correct answer is option O a: $11 and $11, as stated in the summary.
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Answer questions 1 through 8 based on retirement funding calculation using the 4-step annuity method.
Layla, age 43, currently earns $95,000. Her wage replacement ratio is 82 percent.
She expects that inflation will average 5 percent for her entire life expectancy. She expects to earn 8 percent on her investments and retire at age 67 (full retirement age), possibly living to age 90. Her Social Security retirement benefit in today's dollars is $15,500 per year, for retiring at full retirement age.
Questions 1 through 4: Calculate Layla's capital needed at retirement at age 67 and the amount she must save at the end of each year, assuming she has no current savings accumulated for retirement.
Questions 5 through 8: Calculate the present value of her benefits at ages 63, 67, and 70.
To determine the amount she must save at the end of each year, considering the expected rate of return, inflation rate, and the remaining years until retirement.
To calculate Layla's capital needed at retirement at age 67, we can use the wage replacement ratio. Multiply her current income of $95,000 by the replacement ratio of 82%.To know more about rate of return, visit:
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Compare and contrast the use of government spending changes versus tax changes as a means of influencing the course of the economy. Is one or the other preferable in specific situations? Imagine for a moment that you have two roommates, who each have opposing viewpoints on nearly everything, including politics and economics. Taylor is adamant that the best way to manage the economy is through tax changes, while Morgan insists that it’s better to adjust the economy through government spending. What would a Neoclassical economist say? What would a Keynesian economist say? Which roommate do you agree with, and why? Find a news article to help support your opinion. Summarize the article and include the link to in your response.
A neoclassical economist would argue that tax changes are preferable to government spending changes for influencing the course of the economy.
On the other hand, a Keynesian economist would advocate for government spending as a more effective tool. Personally, I align with the neoclassical economist's viewpoint, as tax changes provide greater flexibility and efficiency in economic management.
While government spending can stimulate demand in the short term, it can lead to long-term inefficiencies and potential crowding out of private investment. Tax changes, on the other hand, can incentivize productive behavior, encourage savings and investment, and provide individuals and businesses with more control over their resources.
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A critical examination of the possible types of employee reactions to the proposed change, again using the key theory {The theory is Kirkpatrick’s reactions to change (2001) – positive, negative and mixed and the other model is Carnall’s coping cycle (2003)} to underpin the discussion and giving consideration to the different types of employees employed by Eagle Air.
A critical examination of the possible types of employee reactions to the proposed change at Eagle Air can be conducted using Kirkpatrick's reactions to change (2001) and Carnall's coping cycle (2003).
Kirkpatrick's theory suggests that employees can have positive, negative, or mixed reactions to change. Positive reactions may include enthusiasm, motivation, and excitement about the proposed change. Negative reactions may manifest as resistance, fear, and skepticism towards the change. Mixed reactions may involve a combination of positive and negative emotions.
Carnall's coping cycle provides a framework to understand how employees adapt to change. It consists of four stages: denial, resistance, exploration, and commitment. In the denial stage, employees may refuse to acknowledge the need for change.
When examining the types of employees employed by Eagle Air, it is important to consider their individual characteristics, experiences, and attitudes. Different employees may respond differently to the proposed change based on factors such as their job role, level of expertise, and personal circumstances.
By utilizing these theories, Eagle Air can gain insights into the potential reactions and coping mechanisms of their employees, enabling them to plan and implement the proposed change effectively.
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Radovilsky Manufacturing Company, in Hayward, Califomia, makes flashing lights for toys. The company operates its production facility 300 days per year. It has orders for about 11,500 flashing lights per year and has the capability of producing 95 per day. Setting up the light production costs $48. The cost of each light is $1.05. The holding cost is $0.15 per light per year. a) What is the optimal size of the production run? units (round your response to the nearest whole number).
Find the following:
A. Optimal Size of Production
B. Average Inventory
C.Average set up cost per year
D. Annual purchase cost of lights
The optimal size of the production run is 121 units, the average inventory is 60.5 units, the average setup cost per year is $4,528.10, and the annual purchase cost of lights is $12,075.
To calculate the optimal production run size, we can use the economic order quantity (EOQ) formula. The EOQ formula is given by:
EOQ = sqrt((2DS) / H)
Where:
D = Annual demand (11,500 units)
S = Setup cost per production run ($48)
H = Holding cost per unit per year ($0.15)
Plugging in the values, we get:
EOQ = sqrt((2 * 11,500 * 48) / 0.15) = 120.83
Rounding this to the nearest whole number, the optimal size of the production run is 121 units.
To find the average inventory, we can use the EOQ formula:
Average Inventory = EOQ / 2 = 121 / 2 = 60.5 units
The average setup cost per year can be calculated by multiplying the number of production runs per year by the setup cost:
Average Setup Cost per Year = Number of Production Runs * Setup Cost = 11,500 / 121 * 48 = $4,528.10
The annual purchase cost of lights can be calculated by multiplying the annual demand by the cost per light:
Annual Purchase Cost of Lights = Annual Demand * Cost per Light = 11,500 * $1.05 = $12,075
Therefore, the optimal size of the production run is 121 units, the average inventory is 60.5 units, the average setup cost per year is $4,528.10, and the annual purchase cost of lights is $12,075.
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A loan where the borrower receives money today and repays only a single lump sum at some time in the future is called a(n) loan. Select one: a. amortized b. continuous c. balloon x d. pure discount e. interest-only f. recurring
A balloon loan is one in which the borrower obtains funds now and makes just one lump sum payment later on.
With a balloon loan, you can borrow more money and pay it back over a longer period of time than you would with a conventional loan.
Balloon payments are larger-than-usual payments that are made at the end of a mortgage term in order to cover the remainder of the principal owed on the loan. To put it another way, the term "balloon" refers to a large final payment due at the end of a loan term.
Amortized loan: Amortization is the process of dividing a loan into smaller payments that are paid over time. The borrower will pay interest plus a portion of the principal in each payment.
Interest-only loan: For a specified period, the borrower only pays the interest on the loan.
Pure discount loan: A pure discount loan is one in which the borrower repays only the principal.
Balloon loan: The borrower receives money today and pays only one lump sum in the future.
Recurring loan: A recurring loan is a loan that is available to the borrower on an ongoing basis.
Continuous loan: Continuous loan refers to a line of credit that is accessible to the borrower on a continuing basis.
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sarah U=100x0.5 y0.5
Jani U=50x0.4 y0.6
Px= 10
Py= 20
Current output
x= 58
y=36
sarah income I=600
Jani income I=700
1. Calculate MRS for sarah and jani.
2. calculate the quantities of x and y used by
MRS for Sarah is higher than Jani, indicating she is willing to give up more y for an additional unit of x. Sarah uses 34.55x and 26.54y, while Jani uses 23.37x and 28.44y.
1. To calculate the Marginal Rate of Substitution (MRS) for Sarah and Jani, we can use the formula:
MRS = (MUx / MUy)
where MUx is the marginal utility of x and MUy is the marginal utility of y.
For Sarah, we have:
MUx = (dU/dx) = 50x^(-0.5)y^(0.5) = 50(58)^(-0.5)(36)^(0.5) ≈ 8.21\
MUy = (dU/dy) = 50x^(0.5)y^(-0.5) = 50(58)^(0.5)(36)^(-0.5) ≈ 2.74
MRS of Sarah = MUx / MUy = 8.21 / 2.74 = 2.99
For Jani, we have:
MUx = (dU/dx) = 40x^(-0.6)y^(0.4) = 40(58)^(-0.6)(36)^(0.4) ≈ 6.04\
MUy = (dU/dy) = 40x^(0.4)y^(-0.6) = 40(58)^(0.4)(36)^(-0.6) ≈ 5.07
MRS of Jani = MUx / MUy = 6.04 / 5.07 = 1.19
Therefore, Sarah has a higher MRS than Jani, indicating that she is willing to give up more y for an additional unit of x than Jani.
2. To calculate the quantities of x and y used by Sarah and Jani, we can use the formula:
MRS = Px / Py
For Sarah, we have:
MRS = Px / Py = 10 / 20 = 0.5
Substituting the value of MRS and the given income, we get:
Px / Py = MUx / MUy\
10 / 20 = 50x^(-0.5)y^(0.5) / 50x^(0.5)y^(-0.5)\
y / x = (10 / 20) \* (58)^(0.5) / (36)^(0.5)\
y / x ≈ 0.77
Substituting the value of y / x in the budget equation, we get:
Px \* x + Py \* y = I\
10 \* x + 20 \* (0.77x) = 600\
x ≈ 34.55\
y ≈ 26.54
Therefore, Sarah uses approximately 34.55 units of x and 26.54 units of y.
For Jani, we have:
MRS = Px / Py = 10 / 20 = 0.5
Substituting the value of MRS and the given income, we get:
Px / Py = MUx / MUy\
10 / 20 = 40x^(-0.6)y^(0.4) / 40x^(0.4)y^(-0.6)\
y / x = (10 / 20) \* (58)^(0.4) / (36)^(0.6)\
y / x ≈ 1.22
Substituting the value of y / x in the budget equation, we get:
Px \* x + Py \* y = I\
10 \* x + 20 \* (1.22x) = 700\
x ≈ 23.37\
y ≈ 28.44
Therefore, Jani uses approximately 23.37 units of x and 28.44 units of y.
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Strategic Management
-How can a decision maker identify strategic factors in a
corporation’s external international environment? Your
answer shouldn't exceed 120 words.
Decision makers can gain a comprehensive understanding of the external international environment and identify the critical strategic factors that will shape the corporation's success in the global market.
A decision maker can identify strategic factors in a corporation's external international environment through the following steps:
Environmental scanning: Conduct a thorough analysis of the global market, considering political, economic, social, technological, and legal factors.
Competitor analysis: Assess the competitive landscape, including the strengths, weaknesses, opportunities, and threats posed by rival firms operating internationally.
Market research: Gather information about customer preferences, trends, and demands in various international markets.
Stakeholder analysis: Identify key stakeholders such as governments, regulatory bodies, suppliers, and partners, and evaluate their influence and impact on the corporation's international operations.
PESTEL analysis: Examine the political, economic, social, technological, environmental, and legal factors affecting the corporation's international environment.
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TRUE/FALSE/MAYBE and EXPLAIN:
It is impossible for the total number of people employed and the
unemployment rate both to fall at the same time.
If the rate of job creation outpaces the growth of the labour force, more individuals can find employment, resulting in a decrease in both unemployment and an increase in the total number of people employed.
It is possible for the total number of people employed and the unemployment rate to both fall at the same time. This can occur when there is a decrease in the overall labour force, meaning fewer people are actively seeking employment. In such cases, even though the number of people employed may decrease, the unemployment rate can also decrease if the decrease in the labour force is proportionally larger. So, it is not impossible for both numbers to fall simultaneously.
That statement is not necessarily true. It is possible for the total number of people employed and the unemployment rate to both fall at the same time under certain circumstances.
When the total number of people employed decreases, it typically indicates a decline in the number of individuals who have jobs. However, if the labour force participation rate also decreases, meaning fewer people are actively seeking employment, the unemployment rate could still decrease even with a decline in the number of employed individuals.
Additionally, economic growth and improved job creation can lead to an increase in the total number of people employed while simultaneously reducing the unemployment rate. If the rate of job creation outpaces the growth of the labour force, more individuals can find employment, resulting in a decrease in both unemployment and an increase in the total number of people employed.
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In your groups create a short report (min 3 pages, no maximum) for Taylor Guitar that outlines your FINAL RECOMMENDATION for the network design of the company in Canada. Include your detailed recommendation as it relates to facility locations, key transportation routes, supply chain flow and all rationale for your decisions
In this report, we will recommend the network design for Taylor Guitars in Canada that will help it to achieve an efficient and effective supply chain flow.
Facility Location Taylor Guitars is currently operating in Canada with two warehouses, one in Toronto and the other in Vancouver. The warehouses are situated at the two extreme ends of the country, which makes the transportation of raw materials and finished goods from the manufacturer's facilities to these warehouses a complicated process. We recommend the company relocate the Vancouver warehouse to Edmonton, which is centrally located in Canada.
We suggest Taylor Guitars adopts a hybrid supply chain model. This model combines elements of both push and pull strategies to optimize the supply chain. This hybrid model is designed to be more flexible than a pure push or pull model. It will enable the company to reduce costs and improve service levels while providing greater agility to respond to changes in customer demand. Rationale We recommend these changes because they will streamline the supply chain network, which will ultimately lead to cost savings, improved delivery times, and increased customer satisfaction.
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Your company, Zenith Horizons Inc. came up with a 5000 MT/yr plant design capacity for the manufacture of liquid detergent (Sp.Gr. =1.06; sold at P70/litre), which is targeted to operate by 2019. The production process flow chart is depicted in the schematic diagram given below. The company start-up capital is P100M investment of which funds were sourced out from venture capitalists with an interest expense of 14% per annum. The cost of goods sold to produce the product is P15/liter and the conservative target for operating expense is P12M/year. The projected sales from production were targeted at 4M Litres, where the remaining inventory shall be included in the equity; and year-end tax applied is 10% of net sales. Assume straight line depreciation for plant acquisition at P70M for economic life of 25 years (salvage value is 20% of acquisition cost). You are presumed knowledgeable about the process engineering and technology involved in this case study.
Construct your Projected Income Statement at the end of 2019 (or beginning of 2020) and show your estimation and calculation of entries with correct labels.
The Net Profit after Tax (NPAT) for Zenith Horizons Inc. at the end of 2019 or beginning of 2020 is P163,800,000.
Here is the projected income statement for Zenith Horizons Inc. at the end of 2019 or beginning of 2020 with the necessary calculations:
Projected Income Statement for Zenith Horizons Inc. at the end of 2019 or beginning of 2020ParticularsSalesRevenue from sales = (4,000,000 liters x P70/liter)P280,000,000Cost of goods sold
Variable cost = (P15/liter x 4,000,000 liters)P60,000,000
Fixed costP12,000,000
Total cost of goods sold P72,000,000
Gross ProfitP208,000,000
Operating Expense Fixed Operating ExpenseP12,000,000Net Profit before Interest and Tax (PBT)P196,000,000Interest ExpenseP14,000,000Profit Before Tax (PBT)P182,000,000Income Tax (10% of PBT)P18,200,000Net Profit After Tax (NPAT)P163,800,000
Calculation:1. Sales: Sales = 4,000,000 liters x P70/liter = P280,000,0002. Variable cost:
Variable cost = P15/liter x 4,000,000 liters = P60,000,0003. Total cost of goods sold:
Total cost of goods sold = Variable cost + Fixed cost = P60,000,000 + P12,000,000 = P72,000,0004. Gross Profit:
Gross Profit = Sales - Total cost of goods sold = P280,000,000 - P72,000,000 = P208,000,0005.
Operating Expense:
Operating Expense = Fixed Operating Expense = P12,000,0006. Net Profit before Interest and Tax (PBT):PBT = Gross Profit - Operating Expense = P208,000,000 - P12,000,000 = P196,000,0007. Interest Expense:Interest Expense = P100,000,000 x 14% = P14,000,0008.
Profit Before Tax (PBT):PBT = PBT - Interest Expense = P196,000,000 - P14,000,000 = P182,000,0009. Income Tax:Income Tax = 10% of PBT = 10% x P182,000,000 = P18,200,00010. Net Profit After Tax (NPAT):NPAT = PBT - Income Tax = P182,000,000 - P18,200,000 = P163,800,000
Therefore, the Net Profit after Tax (NPAT) for Zenith Horizons Inc. at the end of 2019 or beginning of 2020 is P163,800,000.
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Consider a European put option and a European call option on a \( \$ 40 \) nondividend-paying stock. Both options have 6 months remaining and both have a \( \$ 35 \) strike price. The risk-free intere
a. The no-arb price for the call option is approximately $11.176. b. The call option is in-the-money, and the put option is out-of-the-money. Under the no-arb condition, the call option is more expensive. c. An arbitrageur would buy the underpriced call option and short sell the stock. d. The no-arb price for the put option is approximately $5.824. e. An arbitrageur would sell the overpriced put option and buy the underlying stock.
a. To calculate the no-arbitrage price for the call option, we can use the put-call parity relationship:
Call Price - Put Price = Stock Price - Strike Price * e^(-r * T)
Given that the market price of the put is $6, the stock price is $40, the strike price is $35, the risk-free interest rate is 5% (or 0.05), and the time to expiration (T) is 6 months (or 0.5 years), we can plug in these values:
Call Price - $6 = $40 - $35 * e^(-0.05 * 0.5)
Solving for the Call Price:
Call Price = $40 - $35 * e^(-0.05 * 0.5) + $6 ≈ $11.176
Therefore, the no-arbitrage price for the call option is approximately $11.176.
b. The call option is in-the-money if the stock price is above the strike price, and the put option is in-the-money if the stock price is below the strike price. In this case, since the stock price is $40 and the strike price is $35, the call option is in-the-money and the put option is out-of-the-money. Under the no-arbitrage condition, the call option should be more expensive than the put option.
c. If the quoted market price of the call option is $9, an arbitrageur would likely take the following actions:
Buy the underpriced call option: The arbitrageur would buy the call option at the market price of $9, taking advantage of the lower price.
Short sell the stock: The arbitrageur would borrow and sell the underlying stock at the current stock price of $40.
By buying the call option and short selling the stock, the arbitrageur would create a synthetic long position in the stock, which would be equivalent to buying the stock itself. This strategy allows the arbitrageur to profit from the underpriced call option and the expectation that the stock price will increase.
d. To calculate the no-arbitrage price of the put option when the quoted market price of the call is $9, we can use the put-call parity relationship:
Put Price = Call Price - Stock Price + Strike Price * e^(-r * T)
Given that the market price of the call is $9, the stock price is $40, the strike price is $35, the risk-free interest rate is 5% (or 0.05), and the time to expiration (T) is 6 months (or 0.5 years), we can plug in these values:
Put Price = $9 - $40 + $35 * e^(-0.05 * 0.5)
Solving for the Put Price:
Put Price = $9 - $40 + $35 * e^(-0.05 * 0.5) ≈ $5.824
Therefore, the no-arbitrage price for the put option is approximately $5.824.
e. If the quoted market price of the put option is $6, an arbitrageur would likely take the following actions:
Sell the overpriced put option: The arbitrageur would sell the put option at the market price of $6, taking advantage of the higher price.
Buy the underlying stock: The arbitrageur would buy the underlying stock at the current stock price of $40.
By selling the put option and buying the stock, the arbitrageur would create a synthetic long position in the stock, which would be equivalent to buying the stock itself. This strategy allows the arbitrageur to profit from the overpriced put option and the expectation that the stock price will increase.
At time T, the arbitrageur would exercise the put option if the stock price is below the strike price and deliver the stock to fulfill the option contract. However, if the stock price is above the strike price, the arbitrageur would let the put option expire worthless.
These actions allow the arbitrageur to take advantage of the overpriced put option and generate risk-free profits.
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Complete Question :
Consider a European put option and a European call option on a $40 nondividend-paying stock. Both options have 6 months remaining and both have a $35 strike price. The risk-free interest rate is 5% CCAR. a. The market price of the put is $6. Calculate the no-arb price for the call. b. Which of the options is in-themoney? Which is out-of-the-money? Under the no-arb condition, is the call or the put more expensive? c. Describe the likely actions of an arbitrageur now and at time T if the quoted market price of the call is $9. d. Now as assume the quoted market price of the call is $9.00. Calculate the no-arb price of the put. e. Describe the likely actions of an arbitrageur now and at time T if the quoted market price of the put is $6.
at the federal level, an _______ functions within an established
cabinet department.
a. Independent agency. b. Executive agency. c. State agency. d.
Legislative agency.
The correct answer is option a. Independent agency. At the federal level, a functions within an established cabinet department is Independent agency.
At the federal level, an independent agency functions within an established cabinet department. Independent agencies are federal agencies that operate independently from the executive departments and are created by Congress to carry out specific functions.
They have specific missions and often have regulatory or oversight authority in their respective areas.
Examples of independent agencies include the Environmental Protection Agency (EPA), Federal Trade Commission (FTC), and Securities and Exchange Commission (SEC).
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