Know the difference between buying and selling volatility

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Reference no: EM131931792

1. Know the difference between buying and selling volatility (aka debit or credit positions), and the implications for the theta component of a trade.

2. Suppose a company uses trade credit with the terms of 5/10, net 60. (Use 365 days for calculation.)

If the company pays its account on the 60th day, the effective borrowing cost of skipping the discount on day 10 is closest to

Entry field with incorrect answer

a. 45.4 percent.

b. 32.0 percent.

c. 34.6 percent.

d. 30.4 percent.

3. A small business purchased $90,000 of personal property in 2016. The business may want to take advantage of the Section 179 expensing election. If net income before depreciation is $15,000, the taxpayer is eligible to take Section 179 expense up to which of the following amounts in 2016?

$25,000

$15,000

$90,000

Reference no: EM131931792

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