.Why the calculated Black Scholes Call price is different to the NASDQ quoted bid and ask price, the Black Scholes call price is $2.5 lower than the quoted Bid Price. What is the interpretation of the difference? A detailed analysis.
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- (1) which of the following assets is traded only in an over the caunter market? (a) stocks (b) comodities (c) treasuri bonds (d) all of the above (e) none of the aboveHow do the shareholders who own a company choose the actual company managers?NAME ____________________(6) Due _____________ Show work for credit! The demand for product Q is given by Q = 350 - .25P and the total cost of Q by: STC = 20000 + 200Q - 9Q2 + 1/3Q3 a. Find the price function and then the TR function. See Assignment 3 or 4 for an example. b. Write the MR and MC functions below. Remember: MR = dTR/dQ and MC = dSTC/dQ. See Assignment 5 for a review of derivatives c. What positive value of Q will maximize total profit? Remember: Setting MR = MC and solving for Q will give you the Q that maximizes total profit. The value of Q you get should not be zero or negative. d. Use the price function found in (a) to determine the price per unit that will need to be charged at the Q found in (c). This will be the price you should ask per unit for each unit of Q that maximizes total profit. e. How much total profit will result from selling the quantity found in (c) at the price found in (d)? Remember, profit is TR – STC.…
- 9. Continuing with the question above (please look at question 8 on the image attached), if Sainsbury's shareholders are concerned with managements' behaviour, which of the following options is LIKELY to help? a) Linking managers' salaries to the firm's growth rates.b) Providing stock options for the managers.c) Linking manager's salaries to the firm's revenue.d) Raising the manager's salaries.e) All of these will help. (There is an image attached with the question needed to complete this)6 Which of the following concepts can be used to characterise the relationship between an insurer and insurance applicants? a. Nash equilibrium b. asymmetric information c. Pareto efficiency d. firm-specific assets e. employment rentD & R A1 11 - 3 Question 11. Hedging with Stock Index Futures You manage a portfolio that is currently all invested in equities in companies in five major Canadian industries. The market value involved and beta for each industry are shown in the table below. Industry Market Value Beta Oil and Gas $1,100,000 1.2 Technology 900,000 1.5 Utilities 1,500,000 0.8 Financial 1,000,000 1.3 Pharmaceutical 800,000 1.1 You believe that the Canadian equity market is on the verge of a big but short-lived downturn. You would move your portfolio temporarily into T-bills, but you do not want to incur the transaction costs of liquidating and re-establishing your equity position. Instead, you decide to hedge your portfolio with three-month S&P/TSX 60 index futures contracts for one month. Currently, the level of the S&P/TSX 60 index is 851.38, the three-month futures price of the S&P/TSX 60 is 856.40, and one contract is for $200 times…
- Please complete the table. Thank you! Note: use partial derivativesOver-the-counter credit derivatives are private contractsbetween two companies; is it appropriate for the government to force them to be soldon regulated exchanges like commodities are? Why or why not?Question A Call(50) = 9; Call(55) = 7; Put(50) = 7; Put(55) = 5. All options are on the same stock and have the same expiration time. Which strategy(s) yields arbitrage profit? A. Buy Call(50), sell Call(55) B. Sell Call(50), buy Call(55) C. Buy Put(50), sell Put(55) D. Sell Put(50), buy Put(55) E. Both A and C F. Both A and D G. Both B and C H. Both B and D . Full explain this question and text typing work only We should answer our question within 2 hours takes more time then we will reduce Rating Dont ignore this line.
- 27. Which of the following best describes why insider trading is said to be unethical?a. The theft of information gives the insider an unfair advantage in the organization and the markets.b. The theft of information can change the value of the stock so that it reflects the true value of the organization.c. Insider trading harms relationships between the organization and its customers.d. Insider trading increases society’s overall utility by increasing the size of the market.3. Discuss the various important qualities of a secondary market that would attract you as an investor.BRIEFLY EXPLAINBriefly discuss: price earning rastio, dividend valuation model and discounted cash flow methods. Practical problems associated with using valuation approaches.
