You own a stock worth $100. A put has a strike price of $90 and a premium of $8. A Call has as strike price of $110 and a premium of $8. Use this information to create a Collar strategy. Graph the profits and Losses. Why would this stragegy be used?

Q: Student B placed his allowance amounting to P 5000 in a savings account with a nominal interest rate…

A: Amount placed (A) = P 5000 r = 5% per annum = 5%/12 per month = 0.4167% per month n = 5 years = 60…

Q: You are consider we IRRS that excee RRECT? Assume t

A: Cost of capital refers to the tool which is helpful in analyzing the cost of the capital projects…

Q: A car loan of $46,700 is amortized over 8 years by equal end-of-month payments at 2.9% compounded…

A: Ans = 36019.15     =PMT((2.9%/12),8*12,-46700,0) = $ 545.65

Q: Student E saves his allowance worth of P 25,000 and promised to use it only when it reaches the…

A: Present value (PV) = P 25,000 Future value (FV) = P 45,000 Interest rate = 8% Quarterly interest…

Q: A quoted rate of interest is a “nominal” rate because it includes inflation expectations. a) True…

A: Answer:-   True. The nominal interest rate comprises of the real interest rate and a premium for…

Q: On January 1, 2013, Janet buys a bond for $10,000 that makes coupon payments of $600 after each of…

A: Here, Coupon Payment is $600 Face Value of Bond is $10,000 Time to maturity remaining at Feb 1, 2014…

Q: C. Paxton Company provided the following income statement for last year: P 87,021,000 (62,138,249) P…

A: Times interest earned ratio shows how many times a company can cover its interest expense with its…

Q: Yield to maturities, par values and market prices for government securities (with semi-annual…

A: Maturity (Years) Yield To Maturity Par Value (K) Market Price (K) 0.5 6% 100 97.09 1 7% 100…

Q: Intro Find the present values of these annuities due. Part 1 What is the present value of $6,000 per…

A: 1) Quarterly payment (Q) = $6000 r = 6% per annum = 1.5% quarterly n = 8 years = 32 quarters

Q: actively targeted at 2.2. The debt beta is estimated to be 0.28 in both old and new leverage levels.…

A: A company having both debt and equity in its capital structure is known as a levered company. A…

Q: A stock has a required return of 11% and a dividend yield of 4%. The price of the stock is $90 and…

A: SOLUTION : GIVEN, Required return = 11% Dividend yield = 4% Stock price = $90   Now, Firsty we have…

Q: B. Last year, Nikkola Company had net sales of P2,299,500, and cost of goods sold of P1,755,000.…

A: Note: Hi! Thank you for the question, As per the Honor Code of Bartleby, we are allowed to answer…

Q: 5.11 At 10 pcrcent annual intercst rate, which of the following has the largest present valuc: u)…

A: As you have asked multiple questions, we will answer the first question for you. Please post…

Q: P=P1,000 r= 5% t= 10 years m=4 What would be the future value of the ordinary annuity of the…

A: Given: Particulars Amount Payment(PMT) P1000 Years 10 Rate 5% Compounding 4

Q: a. What is the size of the quarterly payments? (Round to the nearest cent)   b. How much will the…

A: Loan amortization refers to a schedule which is prepared to shows the periodic loan payments, amount…

Q: Your friend is currently paying $734 in rent monthly in Fort Wayne and would rather apply the…

A: We need to use excel PV function to calculate amount borrow or loan value. The formula is…

Q: Sara owns a small business and plans on retiring in 5 years. Given his past experiences, she expects…

A: To find if it is a good investment, the calculation for the required return should be done first.…

Q: 5. You have one asset in CCA Asset Class 12. You purchased this asset five years prior for $10.25…

A: CCA or Capital Cost Allowance- It is an annual deduction in the Canadian Tax Code. Under CCA,…

Q: Find the value of an ordinary annuity if payments are made in the amount of R and interest is…

A: The value of annuity can be calculated with the help of future value function

Q: Calculate the present value:

A: Present Value of Annuity: It represents the present worth of the future annuity stream of cash…

Q: Mr. Jhonny bought a car worth P900,000 last January 1, 2000, and intend to sell it for P300,000…

A: Annuity means a set of finite number of deposits/payments made at equal intervals of time for a…

Q: What is the current cost of bonds? Select one:

A: Bonds are defined as financial instruments used by companies to raise additional funds from the…

Q: antha lives under an imputation tax system. Her income tax rate is 35%, which applies to all of her…

A: The companies pay dividend out of the net income and this is paid to shareholders but shareholder…

Q: A financial analyst is in the process of estimating the cost of capital of Gewicht GmbH. The…

A: Target Capital structure A target capital structure can be a capital structure, resulted from the…

Q: Ratio Analysis A. Chen Company has current assets equal to P5,000,000. Of these, P1,000,000 is cash,…

A: Solution :1 Current Ratio : Current Assets / Current Liabilities                       Current Ratio…

Q: - Consider a firm that has EPS of $5 at the end of the first year, a dividend-payout ratio of 30%, a…

A: Discount rate is 16% Return on retained earning is 20% EPS is $5 Dividend Payout ratio is 30%   To…

Q: When you have a fixed investment horizon, it is important to maximize your earnings. You must…

A: Reinvestment risk refers to the possibility that an investor will not be able to reinvest the cash…

Q: pay out period.

A: The payback period refers to the amount which is required to cover its initial investment in the…

Q: If the interest rate is 10%, what is the present value of a security that pays you K1,100 next year,…

A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one…

Q: Faisal has $14,000 in his savings account and can save an additional $4200 per year. If interest…

A: The time value of money concepts can be used to estimate the number of periods it will take to…

Q: Tech Techies Company has a project available with the following cash flows : Year Cash Flow 0…

A: Year Cash flow 0 -16800 1 6900 2 8200 3 3500 4 3100

Q: Suppose Capital One is advertising a 60-month, 5.14% APR motorcycle loan. If you need to borrow…

A: The monthly payment can be calculated with the help of present value of annuity function.

Q: ardial GreenLights, a manufacturer of energy-efficient lighting solutions, has had such success with…

A: In finance external equity refers to the funds that a company has to obtain from outside the company…

Q: Q7-3. If interest is compounded more than once a year, will the effective interest rate be higher…

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Q: What is the price of the first bond (and the second bond) and Calculate j.

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Q: Assume Merck (MRK) just finished paying an annual dividend of $2.1 (for 2019). You look up their…

A: GivenRisk free rate = rf =1.96%Beta=B=0.34Dividend=D=$2.1Market risk premium= rm-rf =9.9%Stock…

Q: Price Forward Dividend 1T Target Est $75.20 $0.80 $87.76 Given the information in the table, t he…

A: Given: Forward dividend = $0.80 Forward price = $87.76 Required return = 14.80%

Q: What are Critical success factors of the investment sector or banking sector?

A: Banking is the ultimate expression of using other people's money to generate profit. Banks use…

Q: Describe three circumstances under which a person who has ceased to be a liquidator is released from…

A: Liquidation of assets can be voluntary or compulsory. Voluntary liquidation may be conducted to…

Q: Maria loaned an amount of 100,000 in payable in 15 equals installments. The first payment was made a…

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Q: You are considering two ways of financing a spring break vacation. You could put it on your credit…

A: The modified rate of return for compounding interest into actual terms of time is called the…

Q: Q7-8. Is it possible to convert a present value of an ordinary annuity table to the present value of…

A: Let r = Interest rate Periodic payment = P Duration = n

Q: Bank Balance Sheet Assets Liabilities and Equity Reserves $20,000 Deposits $100,000 Loans 95,000…

A: When the total debt is divided by the total equity the outcome is known as the equity multiplier. It…

Q: How long will it take an RESP to grow to $200,000, if the plan owner contributes $250 at the end of…

A: The payment flow which continues for a definite time period and terminates after lapse of time…

Q: A loan of $6000 is being repaid with quarterly installments of P at the end of each quarter for 5…

A: Given, Loan amount is $6000 Term of loan is 5 years rate is 12% Payment is made quarterly.

Q: (b) What is the present value of $30,700 to be received at the end of each of 5 periods, discounted…

A: SOLUTION : GIVEN, Future value = $30,700 Number of times = 5  Rate = 10% = 0.10

Q: June 7, 2019, matures on July 1, 2039, and may be called at any time after July 1, 2029, at a price…

A: Yield to maturity refers to the total return that will be paid out from the time a bond is acquired…

Q: Puckett Products is planning for $5 million in capital expenditures next year. Puckett’s target…

A: A Residual Dividend Policy is a policy in which the earnings of the company are first used for the…

Q: Identify methods for using and analysing working capital cycles ( max. 300 words )

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Q: Find the mean of Terry's stock, giving the following information? Year Return 2011 22% 2012 -8% 2013…

A: Here, To Find: Mean =?

Market Efficiency

Market efficiency refers to the market's ability to provide investors with all available information about investment options for buying and selling securities. Market efficiency reflects the true value of securities without undervaluing or overvaluing them. When the quality and quantity of information increase, the market becomes more efficient, allowing it to reduce arbitrage and obtain higher market returns from investment. In a well-functioning market, everyone receives all information completely and immediately at no cost. It opens up a plethora of opportunities for investors to access various investment options.