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Black-Scholes and Collar Cost An investor is said to take a position in a "collar" if she buys the asset, buys an out-of-the-money put option on the asset, and sells an out-of-the-money call option on the asset. The two options should have the same time to expiration. Suppose Marie wishes to purchase a collar on Hollywood, Inc., a non-dividend-paying common stock, with six months until expiration. She would like the put to have a strike price of $60 and the call to have a strike price of $90. The current price of Hollywood's stock is $75 per share. Marie can borrow and lend at the continuously compounded risk-free rate of 5.5 percent per annum, and the annual standard deviation of the stock's return is 45 percent. Use the Black- Scholes model to calculate the total cost of the collar that Marie is interested in buying. What is the effect of the collar?
Distinguish between disparate treatment, disparate impact, and reasonable accommodation theories of discrimination in terms of (a) number of plaintiffs, (b) intent, and (c) defenses.
Precision lathe costs $11,000 and will cost $21,000 a year to operate and maintain. If the discount rate is 12% and the lathe will last for 5 years, what is the equivalent annual cost of the tool?
What is the future value of $1,030 a year for 6 years at a 5 percent interest?
The answers are 60 @ 17.65% and 100 @ 28.04%. I know how to get the number of shares, but can't I get the yield rates. Thanks.
Suppose you issued a 120-day forward contract to exchange 200,000 euros into Canadian dollars. How many dollars are involved?
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The Cabazos Company is in the process of preparing a flexible budget to determine why operating profit fell below the budgeted amount. Complete the following flexible budget and list the reasons for the variance between budgeted and actual profit.
You need to purchase 100,000 Canadian dollars with U.S. dollars. How many U.S. dollars will you need for your purchase
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If you were Gov. Blagojevich's public relations adviser, how would you have suggested he respond to the seating of Roland Burris as senator?
you have run a regression of monthly returns on a stock against monthly returns on the sampp 500 index and come up with
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