User Account

All Pages

Rate of return on the calls over the return on the stock

Assignment Help Finance Basics
Reference no: EM131627655

You have 10,000$ to invest and want to buy 100 shares or 10 call options on the shares. The call option expires in 6 months, has a strike price of 100$ and has a premium of 10$ per share. the stock price is currently 100$. Assume that the stock price rises to 125 by the option expiry date, what is the ratio of the rate of return on the calls over the return on the stock?

a) 1

b) 2

c) 4

d) 6

e) 8

Reference no: EM131627655

Questions Cloud

Find the value of an ordinary annuity : Find the value of an ordinary annuity after two years of $1,500 invested semiannually at 4% annual interest.
Details the term cannibalization : On page 457, your textbook details the term Cannibalization. identify two corporations that have dealt with cannibalization and what steps.
Find future value and total interest of an ordinary annuity : Find the future value and total interest of an ordinary annuity with annual payments of $5,000 at 2.9% annual interest after four years.
How will you deal with a difficult customer : How will you deal with a difficult customer? How can you make relationships with a difficult customer?
Rate of return on the calls over the return on the stock : Assume that the stock price rises to 125 by the option expiry date, what is the ratio of the rate of return on the calls over the return on the stock?
Feel misunderstood by their target audience : One of the telltale signs that a brand has neglected their market positioning is that they feel misunderstood by their target audience.
Specific issues women experience in business : What are some of the specific issues women experience in business?
What are important healthcare finance problem : What are important healthcare finance problem or challenge?
Why is it important to conduct a swot analysis : Why is it important to conduct a SWOT analysis? What are the weaknesses of a SWOT analysis?

Reviews

Write a Review

Finance Basics Questions & Answers

  Discuss at least three potential issues in utilizing ratio

1.ratio analysis is a common technique in financial analysis.nbsp one of your colleagues states that a thorough ratio

  Write a memo recommending elizabeth larson

Write a memo to Robert Underwood, the vice president, recommending one of these candidates.- Assume that personality is the most important criterion, and write a memo recommending Elizabeth Larson.

  Compute the market debt to equity ratio

Compute the market Debt to Equity ratio

  What was its cost of goods sold

what was its cost of goods sold? a. Assume FIFO inventory accounting b. Assume LIFO inventory accounting

  The canning company has been hard hit by increased

the canning company has been hard hit by increased competition. analysts predict that earnings and dividends will

  Subsets of the original sample space

If the probability set function P (Γ) de?ned on the subsets of the original sample space Ω assigns a probability 1/52 to each of these outcomes, describe the induced probability set function PX (A) induced on all the subsets of the space V by this ra..

  What are the company''s inventory turnover ratio

What are the company's inventory turnover ratio and days' sales in inventory?

  How much money would have to be deposited every quarter if

how much money would have to be deposited every quarter if a company wants to have 75000 at the end of three years .

  Separate commercial and investment banking

Should banks be too big to fail? Should big banks be broken up? Should the Glass-Steagall Act be restored to separate commercial and investment banking operations? Can the U.S. economy function successfully without big banks?

  What effective annual rate does the bank pay

If a bank pays a 6% nominal rate, with monthly compounding, on deposits, what effective annual rate does the bank pay?

  Analyze the three short cases at the end

Write a paper of more than 700 words that answers the questions at the three short cases at the Analyze the three short cases at the end of Chapter 8 from the text book, Managing Business Ethics. Write a paper of more than 700 words that answers the ..

  Using the same manufactured goods category

Using the same manufactured goods category, forecast what products in your category will be replace with innovative products and latest segment. Present a motivation for your preference.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd