what are the simple equations for pay off of buying and writing calls and puts and profit of writing calls and puts and buying calls and puts

Q: Coco borrowed ₱100,000 and wishes to repay Kobe at the end of each month with payments of ₱3,000 for…

A: Loan amount (P) = 100,000 Monthly payment (C) = 3,000 Monthly interest rate (r) = 0.0075 (i.e. 0.09…

Q: A loan is amortized by level payments made at the end of each quarter, for 25 years: The monthly…

A: Amortization refers to the breakdown of loan payments into principal and interest portions. It…

Q: The spot rate is $1.60/£. Three-month interest rate in the US is 6% while the three-month interest…

A: Interest Rate Parity theory (IRPT) When the interest rate of two country is different, then the…

Q: Which one of the following is a use of cash? Group of answer choices (A).payment to a supplier…

A: Solution:- Use of cash means outflow of cash by the firm.

Q: You expect to incur a cost and make a payment of €35,000 in one year. The current EUR/GBP exchange…

A: Exchange rate risk is the risk that the value of a currency will change relative to another…

Q: a) Gakinya is a Kenyan investor has sh100, 000 to speculate in forex market. Assume farther that…

A: Concept. Triangular Arbitrage involves use of 3 currencies to make profit by using differences in…

Q: Stock A's beta is 1.7 and Stock B's beta is 0.7. Which of the following statements must be true…

A: Beta is a measure of systematic risk and it cannot be eliminated by diversification. Higher the beta…

Q: An example of systematic risk is:   changes in the Federal budget deficit that could affect…

A: Systematic risk The type of risk that cannot be eliminated or minimized is known as systemic risk.…

Q: The Indirect Method of calculating Cash Flow:   Begins with Net Income.   Begins…

A: Cash flow statement is a report that shows company's cash inflows,cash outflows and net change in…

Q: A real estate broker has a listing where the seller agreed to should capital gains tax and broker's…

A: Net proceeds = P4,895,000.00 Commission = 0.05   Sale price of property = ?

Q: A firm has a net profit/pre-tax profit ratio of 0.60, a leverage ratio of 2.0, a pre-tax profit/EBIT…

A: Dupont equation is used to determine the return and it decomposes the return into the three…

Q: AFN equation Broussard Skateboard's sales are expected to increase by 15% from $7.4 million in 2019…

A: We have to compute the additional fund needed to support the growth in the next year.

Q: Makita Inc. is a tool company. Recently, its stock has been added to the list of over-the-counter…

A: Honor Code: Since you have posted a question with multiple sub-parts, we will solve the first three…

Q: Suppose that you purchased a call option on the S&P 100 Index. The option has an exercise price of…

A: For a call option the exercise price is the amount one is willing to pay if market moves in a…

Q: A bond that has a face value of $3,000 and coupon rate of 3.40% payable semi-annually was redeemable…

A: Bond The financial instrument that helps the company to raise funds to meet its financial need and…

Q: Assume that time today is Dec. 13, 2022. Determine what is being asked in each problem. 1.…

A: The the future value of amount represents the amount that is being initial and amount of interest…

Q: Next period a firm will be worth $56 with 10% probability, $98 with 55% probability, and $152…

A: Data given: Probability Worth ($) 10% 56 55% 98 35% 152 Required rate of return=12%…

Q: Ms. Cruz, a licensed real estate broker obtained a net listing of P6,500,000.00. She sold the…

A: Given  Net listing = P6,500,000 Commission = 5% Capital Gain tax rate =20% (Assumed) Let Gross Sale…

Q: All of the statements below are true of futures contractsexcept that futures contracts: O a. result…

A: Future contract are those contracts to buy or sell commodity or financial instruments at a…

Q: A bond with 6 years remaining until maturity is currently trading for 97:50 per 100 of par Not yet…

A: We have a callable bond here that can be called for the first time at the end of year 4. We need to…

Q: Empirical evidence on acquisitions indicates shareholders of the selling company, and buying…

A: The acquisition of a company refers to its purchase by another company. It is usually carried out to…

Q: Question 12 Common information: A loan is amortized by level payments made at the end of each…

A: The amortization schedule refers to the breakdown of the periodic payments into interest and…

Q: The fast-growing firm of GoodCoffee Inc. is planning its first issue of public stock. The firm will…

A: The two stage dividend discount model can be used to value stocks that go through different stages…

Q: An increase in investor risk aversion would be expected to:   Increase the Risk-Free Rate while…

A: We have to assess the impact of an increase in investor risk aversion on risk free rate and the…

Q: Enter the values you need to put in the TVM calculator. Remember that money paid to the bank is…

A: Future Value The value of a financial asset at a certain point in the future is called the future…

Q: Which of the following statements is correct assuming same market rates for all maturities (flat…

A: The callable bonds are reflective of all such bonds which can be called back by the company before…

Q: ith a new supplier are 2/10, net 30 If unable to pay within the discount period and pay the cash…

A: Companies gives discount to customers to pay early because that is big cost to the company because…

Q: You buy a property valued at $4,000,000 and finance your purchase with a 70% LTV loan. The bank…

A: The value of the property is $4,000,000 The time period is 20 years The interest rate is 5%…

Q: Next period a firm will be worth $56 with 10% probability, $98 with 55% probability, and $152…

A: An entity may acquire funds from various sources. The major sources are debt and equity. The mixture…

Q: You are considering investing in Smart plc's shares and your broker has told you that you can…

A:

Q: 1) In a few short years, you will graduate and enter the workforce. Let us suppose that you and a…

A: We have to find the accumulated amount from an annuity at different points in time.

Q: Ay 3. Commercial Banks and their financial statements with Off-balance sheet activities.

A: Off-balance sheet activities are those activities that are not reported on a company's balance…

Q: Your firm currently has $96 million in debt outstanding with a 8% interest rate. The terms of the…

A: We have to find the PV of the interest tax shields. We need to plot the interest and then the…

Q: What's the forecasted capital expenditure based on the information below? -Net PP&E beginning of…

A: Given: Net PP&E at the beginning  = 4200Net PP&E at the end  = 6800Depreciation expenses =…

Q: Xavier Manufacturing Company has determined its optimal capital structure, which is composed of the…

A: Concept. According to Gordon's growth model, Po = D1 ÷ (ke -g) Where, Po =current  price per share…

Q: Management of companies constantly have to manage dividend policy between the needs of the company…

A: The management of companies will be always looking for adequate management of the dividend policy…

Q: Jackie and Joanie take out a mortgage. Their annual property taxes are $1688 and their annual…

A: A mortgage is a loan taken to purchase a house and is secured by the property purchased as…

Q: Options have zero time value at expiration date T/F

A: Options The financial instruments that help the investors to manage the risk that occurs in the…

Q: Which one of the following is a use of cash? Group of answer choices (A).payment to a supplier…

A: Solution:- Use of cash means outflow of funds i.e. cash by the firm.

Q: On December 31, 2018, Inventory for Company X was $30,000. On December 31, 2019 the Inventory amount…

A: Inventory is a current asset that represents the raw materials, work in progress, and finished goods…

Q: You want to invest in an annuity that will pay you $11,400 per year for the first 8 years and $1,000…

A: The compounding rate of interest is always more beneficial to the investor because it offers more…

Q: Mr. Roxas pays monthly amortization of P54,100 for a parcel of land. The amortization factor for 5…

A: EMI or monthly mortgage payments are the fixed amount paid by the borrower to the lender that…

Q: Rogers Inc. is considering expanding into the sports drink business with a new product.  Assume that…

A: Capital budgeting The method of helping investors make decisions related to long-term investing is…

Q: Case Study: Time value of money Mr. Road has reached his seventieth birthday and is ready to retire.…

A: Investments are very important for an individual's financial journey through which retirement…

Q: Company ABC has a market capitalization of $750 million, Book Value (Shareholder’s Equity) Per share…

A: Solution:- Return of Equity means the amount of net profit as a percentage of value of equity. So,…

Q: +60 bps

A: Prices of bond are indirectly related the yield to maturity of bond and so if the yield to maturity…

Q: The sample data above represent the daily price (Adjusted Close) of Microsoft Corporation (MSFT) and…

A: Date MSFT Stock Price 05-02-2022 107.52 06-02-2022 116.51 07-02-2022 109.41 08-02-2022…

Q: Mr. Samson hired the services of a broker to sell his property. The owner said he bought it at…

A: COST OF PURCHASE OF THE HOUSE = 6300000 REQUIRED GROSS PROFIT = 30% = 6300000*30% = 1890000…

Q: Regine agrees to settle a P100,000 loan borrowed from provident by making monthly salary deduction…

A: Present value of annuity Annuity is a series of equal payment at equal interval over a specified…