Business, 16.12.2019 23:31 willcohen42
Construct profitt diagrams or profit tables on expiration to show what position in ibm puts,
calls and/or underlying stock best expresses the investor's objectives described below. as-
sume ibm currently sells for $150 so that prot diagrams/ tables between $100 and $200 (in
$10 increments) are appropriate. also assume that "at the money" puts and calls cost $15
each. (as usual, the prot calculations ignore dividends and interest.)
(a) an investor wants upside potential if ibm increases but wants (net) losses no greater
than $15 if prices decline.
(b) an investor wants to capture prots if ibm declines in price but wants a guaranteed
limited loss if prices increase.
(c) an investor wants to capture prots if ibm declines in price and is ready to accept
unlimited losses if prices increase. further, the investor wants to break even if the stock
price does not change between now and the maturity of the options.
(d) an investor wants to prot if ibm's upcoming earnings announcement is either unex-
pectedly good or disappointingly bad.
Answers: 3
Business, 22.06.2019 07:10
Refer to the payoff matrix. suppose that speedy bike and power bike are the only two bicycle manufacturing firms serving the market. both can choose large or small advertising budgets. is there a nash equilibrium solution to this game?
Answers: 1
Business, 22.06.2019 15:10
Popeye produces 20 cans of spinach in 8 hours. wimpy produces 15 hamburgers in 10 hours. if each hamburger trades for 1.5 cans of spinach, then: a.wimpy’s production and productivity are greater than popeye’s. b.popeye’s production is greater than wimpy’s, but his productivity is less. c.wimpy’s production is greater than popeye’s, but his productivity is less. d.popeye’s production and productivity are greater than wimpy’s.
Answers: 3
Business, 22.06.2019 19:20
Garrett is an executive vice president at samm hardware. he researches a proposal by a larger company, maximum hardware, to combine the two companies. by analyzing past performance, conducting focus groups, and interviewing maximum employees, garrett concludes that maximum has poor profit margins, sells shoddy merchandise, and treats customers poorly. what actions should garrett and samm hardware take? a. turn down the acquisition offer and prepare to resist a hostile takeover. b. attempt a friendly merger and use managerial hubris to improve results at maximum. c. welcome the acquisition and use knowledge transfer to impart sam hardware's management practices. d. do nothing; the two companies cannot combine without samm hardware's explicit consent.
Answers: 1
Business, 22.06.2019 20:10
As the inventor of hypertension medication, onesure pharmaceuticals (osp) inc. was able to reap the benefits of economies of scale due to a large consumer demand for the drug. even when competitors later developed similar drugs after the expiry of osp's patents, regular users did not want to switch because they were concerned about possible side effects. which of the following benefits does this scenario best illustrate? a. first-mover advantages b. social benefits c. network externalities d. fringe benefits
Answers: 3
Construct profitt diagrams or profit tables on expiration to show what position in ibm puts,
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