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Q. Joseph Jones, a manager at Computer Science, Inc. (CSI), received 10,000 shares of company stock as part of his compensation package. The stock currently sells at $40 a share. Joseph would like to defer selling the stock until the next tax year. In January, however, he will need to sell all his holdings to provide for a down payment on his new house. Joseph is worried about the price risk involved in keeping his shares. At current prices, he would receive $400,000 for the stock. If the value of his stock holdings falls below $350,000, his ability to come up with the necessary down payment would be jeopardized. On the other hand, if the stock value rises to $450,000, he would be able to maintain a small cash reserve even after making the down payment. Joseph considers three investment strategies: Q. Strategy A is to write January call options on the CSI shares with strike price $45. These calls are currently selling for $3 each. h. Strategy B is to buy January put options on CSI with strike price $35. These options also sell for $3 each. c. Strategy C is to establish a zero-cost collar by writing the January calls and buying the January puts. With respect to Joseph's investment goals evaluate each of these strategies. Explain for each what are the advantages and disadvantages? What would you recommend?
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Under oligopoly, if one firm in an industry significantly increases advertising expenditures in order to capture a greater market share, it is most likely that other firms in that industry.
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In 2012, Balnur taught music and earned $20,000. She also earned $4,000 by renting out her basement. On January 1, 2013, she quit teaching, stopped renting out her basement, and began to use it as the office for her new Web site design business.
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The trade or business of manufacturing dolls and accessories
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What steps can a government take to ensure that sustainable development is always considered in assessing which major economic projects or investment proposals to accept.
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