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- If an investor places a _________ order, the stock will be sold if its price falls to the stipulated level. If an investor places a __________ order, the stock will be bought if its price rises above the stipulated level. Group of answer choices stop-loss; stop-buy market; limit stop-buy; stop-loss limit; marketIf an investor places a market order, the stock will be sold if its price falls to the stipulated level. If an investor places a limit order, the stock will be bought if its price rises above the stipulated level.Statement 1: If market exists, fair value is estimated by applying an option pricing model. Statement 2: If the share options vest immediately, the total fair value of options is charged to an expense account with a corresponding credit to equity. A. Both statements are correct. B. Both statements are incorrect. C. Statement 2 is only correct. D. Statement 1 is only correct.
- A three-step binomial tree with terminal stock prices being 1.103, 0.875, 0.695, and 0.552. At time 0, if you have the insider information that at the maturity the stock price will be 0.875. Then, will the option premium at time 0 still be same as if you don't have this information, please choose from the answers below? a) Option premium is irrelevant to the private information (about the underlying) that option holder possesses. b) As in that case, the risk neutral probability of the impossible sample paths become zero.The price of the share / stock that a company observe from a financial market such as Muscat Stock Exchange is known as ..................... Select one: A. Fundamental Price B. Extrinsic Price C. Intrinsic Price D. Market PriceWhat is the difference between the long and the short positions in a contract for the future delivery of the S&P 500 stock index? If you expect stock prices to fall, do you buy or sell stock index futures?View Solution: What is the difference between the long and the short
- If you transmit a market buy order to the stock exchange, will you buy at the bid or the ask? a. Ask b. BidBriefly explain the mechanics of adjustable rate and market auctionpreferred stock.Look at the illustrative new-issue prospectus. a. Is this issue a primary offering, a secondary offering, or both?b. What are the direct costs of the issue as a percentage of the total proceeds? c. Are these direct costs more than the average for an issue of this size?d. Suppose that on the first day of trading the price of Hotch Pot stock is $15 a share. What are the total costs of the issue as a percentage of the market price? e. After paying her share of the expenses, how much will the firm’s president, Emma Lucullus, receive from the sale? f. What will be the value of the shares that Emma Lucullus retains in the company? I am not sure how to attacah the Prospectus beacuse how large the appendix is. I've included what I can below, please let me know if further information is needed. I have the answers for A and C but am stuck on the rest. Prospectus800,000 SharesHotch Pot Inc.Common Stock ($.01 par value)Of the 800,000 shares of Common Stock offered hereby, 500,000 shares are…
- Explain the significance of par value. Does par value indicatethe reasonable market price for a share of stock? Explain.What is the correct way to determine the value of a long forward position at expiration? The value is the price of the underlying ... ... multiplied by the forward price. ... divided by the forward price. ... plus the forward price. ... minus the forward price please need type answer not an imageReconsider the determination of the hedge ratio in the two-state model where we showed that one-third share of stock would hedge one option. The possible end-of-year stock prices, uS0 = $135 (up state) and dS0 = $115 (down state). Required: What would be the call option hedge ratio for each of the following exercise prices: $135, $127, $120, $115, given the possible end-of-year stock prices, uS0 = $135 (up state) and dS0 = $115 (down state)? What do you conclude about the hedge ratio as the option becomes progressively more in the money?
