Compare the percentage gains and losses

Assignment Help Financial Management
Reference no: EM13921030

Stock in Cheezy-Poofs Manufacturing is currently priced at $50 per share. A call option with a $50 strike and 90 days to maturity is quoted at $2.50. Compare the percentage gains and losses from a $12,500 investment in the stock versus the option in 90 days for stock prices of $40, $50, and $60. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Leave no cells blank - be certain to enter "0" and select "None" wherever required. Input all amounts as positive values. Omit the "%" sign in your response.) Options % Gain/Loss Stock % Gain/Loss $40 $50 $60

Reference no: EM13921030

Questions Cloud

What will be the price of each bond if their yields increase : Consider three bonds with 5.3% coupon rates, all making annual coupon payments and all selling at a face value of $1,000. The short-term bond has a maturity of 4 years, the intermediate-term bond has maturity 8 years, and the long-term bond has matur..
When expected inflation increases-nominal interest rate : When expected inflation increases, for any given nominal interest rate the: Consider a zero-coupon bond with a $1,100 payment in one year. Suppose the interest rate decreases from 10% to 8%. The price of this bond: When the price of a bond is below t..
Current estimated value and growth rate : Last Year's Dividend (Do) $2.80. Growth rate for year 1 (g1) 25%. Current Estimated Value (Po) = If the stock was currently selling for $50, would you buy it yes or no?
Find someone who is willing to engage you : Find someone who is willing to engage you for 15 minutes or so in a discussion about the issues surrounding the efforts to improve health care in the United States. In the course of your discussion ask at least 3 questions, each of which fits into a ..
Compare the percentage gains and losses : Stock in Cheezy-Poofs Manufacturing is currently priced at $50 per share. A call option with a $50 strike and 90 days to maturity is quoted at $2.50. Compare the percentage gains and losses from a $12,500 investment in the stock versus the option in ..
Equity investors-long-term creditorsshort-term creditors : Financial ratio analysis is conducted by managers, equity investors, long-term creditors, and short-term creditors. What is the primary emphasis of each of these groups in evaluating ratios?
Yield to maturity and yield to call : Settlement date 10/30/05 Maturity date 10/30/15 Coupon rate 10% Coupons per year 2 Face value $1,000 Selling Price (% of face Value) 115% It can be called in 8 years at $1070

Reviews

Write a Review

Financial Management Questions & Answers

  What was the total interest charged for this amortization

Alice needed capital to expand his business. He borrowed a loan of $20,000,000 from the bank and the load would be compounded monthly at 4.5% p.a. immediately after the loan was incurred. Compute the monthly payment. What was the total interest charg..

  Distribution method for its new stocks

Bank of America, JP Morgan Chase, Morgan Stanley, and Citi Bank are the leading banks in the issuing process of GM’s new stocks. Therefore, GM chooses which of the following distribution method for its new stocks?

  What annual rate of return did he learn on investment

A young boy invested $50 to plant Christmas trees on his grandfather’s farm. When the boy was a freshman in college, six years later, he harvested the trees and sold them for $400. What annual rate of return (i.e. interest rate) did he learn on the i..

  What is the market risk premium

Asset W has an expected return of 16.0 percent and a beta of 1.45. If the risk-free rate is 3.2 percent, what is the market risk premium?

  Determine the present value and future value

You recently get a new job and will be given a raise (beginning in year 1) if $5000 every year. Assume a career spanning 35 years and an interest rate of 8% p.a. Determine the present value, Determine the future value

  What was the total value of the account at the end

At time =0 an engineer deposited $10000 into an account that pays interest at 8% per year,, compounded semi annually. If she withdrew $1000 in months 2,11, and 23, what was the total value of the account at the end of 3 years? Assume NO inter period ..

  Amount of a possible future contingency

Many firms believe that it is very difficult to estimate the amount of a possible future contingency. Should a contingent liability be reported even when the dollar amount of the loss is not known? Should it be disclosed in the notes to financial sta..

  Describe how present and future values concepts apply

Describe how present and future values concepts apply to your income and expenses and ultimately your personal budget, income statement, and balance sheet

  Bonds outstanding with coupon rate

Union Local School District has bonds outstanding with a coupon rate of 3.6 percent paid semiannually and 17 years to maturity. The yield to maturity on these bonds is 3.9 percent and the bonds have a par value of $5,000. What is the price of the bon..

  An economic indicator is data

An economic indicator is data, usually of macroeconomic scale, used by investors to interpret current or future investment possibilities and to judge the overall health of an economy. Identify and define five economic indicators.

  Modigliani miller model with corporate taxes

The main difference between MM II (Modigliani Miller Model with Corporate Taxes) and Miller Model with Corporate and Personal Taxes is:

  What is internal rate of return on this new plant

Microwave Oven Programming, Inc is considering the construction of a new plant. The plant will have an initial cash outlay of $7.1 million (= -$6.1 million), and will produce cash flows of $2.3 million at the end of year one, $4.5 million at the end ..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd