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GAMA stock currently sells for $64.00. A 9-month put option with a strike of $68.00 has a price of $5. Assume a 2% continuously compounded risk-free rate and a 0% continuous dividend yield.
a) What is the price of the associated call option?
b) Show the potential arbitrage strategy if the price of the call option is $5.
Suppose that the inventory period is 40 days, the accounts payable period is 15 days, and the cash cycle is 35 days. What is the accounts receivable period? (Note: Operating Cycle = Inventory Period + Accounts Receivable Period)
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Prepare a spreadsheet that shows the calculations for each company’s 2013 and 2014: Return on Equity, and Price to ending Book Value.
You place an order for 350 units of inventory at a unit price of $140. The supplier offers terms of 1/10, net 30 A. How long do you have to pay before the account is overdue? if you take the full period, how many should you remit? What is the accoun..
You are in desperate need of cash and turn to your uncle, who has offered to lend you some money. What annual interest rate is your uncle charging you?
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