a) The GDP of a large nation is $458 billion. (ii) Investment in this context is expenditures. b. (i) Nominal GDP in 2021 = $131,875,000 (ii) Real GDP in 2020 = $131,250,000 and in 2021 = $125,750,000 (iii) Real GDP Growth Rate in 2021 = -4.18% (iv) Nominal GDP per Capita in 2021 if the population is 750 = $175,833.33.
a) Using the expenditure approach, the Gross Domestic Product (GDP) of a large nation based on the data is as follows:
GDP = C + I + G + (X - M)Where, C = Consumption = $255 billion I = Investment = $84 billion G = Government = $103 billion X = Exports = $249 billion M = Imports = $233 billion
Substituting these values in the above formula, GDP = 255 + 84 + 103 + (249 - 233) = 458
Therefore, the GDP of a large nation is $458 billion.
In this context, "Investment" is defined as the expenditures made by firms or organizations in terms of capital goods, which are used for future production. It includes investments made in equipment, machinery, and buildings.
b) i) Nominal GDP in 2021
Nominal GDP in 2021 = Quantity of Pianos × Price of Pianos + Quantity of Flutes × Price of Flutes= (105,000 × $1250) + (8,000 × $375) = $131,875,000
ii) Real GDP in 2020 and 2021
Real GDP in 2020 = Quantity of Pianos in 2020 × Price of Pianos in 2021 + Quantity of Flutes in 2020 × Price of Flutes in 2021= (100,000 × $1250) + (5,000 × $375) = $131,250,000
Real GDP in 2021 = Quantity of Pianos in 2020 × Price of Pianos in 2020 + Quantity of Flutes in 2020 × Price of Flutes in 2020= (100,000 × $1200) + (5,000 × $350) = $125,750,000
iii) Real GDP Growth Rate in 2021
Real GDP growth rate in 2021 = ((Real GDP in 2021 - Real GDP in 2020) / Real GDP in 2020) × 100= ((125,750,000 - 131,250,000) / 131,250,000) × 100 = -4.18%
iv) Nominal GDP per Capita in 2021 if the population is 750
Nominal GDP per Capita in 2021 = Nominal GDP in 2021 / Population= $131,875,000 / 750 = $175,833.33
Therefore, Nominal GDP per Capita in 2021 is $175,833.33.
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When Boeing decides to invest $5 billion in a new jet airliner,
are its managers certain of the project’s effects on Boeing’s
future profits and stock price? Explain
The managers of Boeing cannot be certain of the project’s effects on the company’s future profits and stock price.
No, when Boeing decides to invest $5 billion in a new jet airliner, its managers are not certain of the project’s effects on Boeing’s future profits and stock price.
This is because investing in a new jet airliner is a risky venture and there are several factors that can affect the project’s outcome.
The success of the project depends on several factors such as consumer demand, fuel prices, competition, regulatory requirements, and many other variables that cannot be predicted with certainty.
The managers of Boeing may use financial models to estimate the potential profits and stock price changes that could result from investing in a new jet airliner.
However, these models are only as good as the assumptions that they are based on, and these assumptions may turn out to be incorrect.
Moreover, the models may not account for unforeseen events that could affect the project’s outcome.
Therefore, the managers of Boeing cannot be certain of the project’s effects on the company’s future profits and stock price.
The amount of $150 is not relevant to the question and therefore was not included in the answer.
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The Nike Swoosh is registered for protection in the correct office in Washington, D.C. Nike registered the Swoosh so no competitors would use anything similar to it. This is an example of O a design patent O a trademark O a copyright O a trade secret
The Nike Swoosh is an example of a trademark.
Nike Swoosh is an example of a trademark. A trademark is a sign, symbol, or logo that differentiates a product or service from those of its competitors. It is a type of intellectual property that gives its owner exclusive rights to use the trademark in connection with certain products or services.The Nike Swoosh is registered for protection in the correct office in Washington, D.C. Nike registered the Swoosh so no competitors would use anything similar to it. This means that only Nike has the right to use the Nike Swoosh to identify their products. If any other company uses it without permission, they could be sued for trademark infringement. Therefore, a trademark is an effective way of protecting a company's brand identity and reputation.
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18.
help
A bond offers a coupon rate of \( 3 \% \), paid annually, and has a maturity of 16 years. Face value is \( \$ 1,000 \). If the current market yield is \( 10 \% \) (discount rate), what should be the p
The bond has a coupon rate of 3% and a maturity of 16 years, with a face value of $1,000. The current market yield is 10%. Using this information, we can calculate the present value of the bond.
To calculate the present value of the bond, we need to discount the future cash flows (coupon payments and face value) back to the present using the market yield as the discount rate.
The coupon payment is 3% of the face value, which is $1,000 * 3% = $30 per year. The bond has a maturity of 16 years, so there will be 16 coupon payments of $30 each.
To calculate the present value of the coupon payments, we need to discount each payment using the market yield of 10%. We can use the present value of an ordinary annuity formula:
PV = PMT * [(1 - (1 + r)^(-n)) / r],
where PV is the present value, PMT is the coupon payment, r is the discount rate, and n is the number of periods.
Using this formula, we can calculate the present value of the coupon payments:
PV_coupon = $30 * [(1 - (1 + 10%)^(-16)) / 10%] = $30 * [(1 - 0.3497) / 0.1] = $30 * 8.503 = $255.09.
Next, we need to calculate the present value of the face value. Since the face value is paid at maturity, it does not involve discounting. Therefore, the present value of the face value is simply its nominal value:
PV_face value = $1,000.
Finally, we add the present values of the coupon payments and the face value to determine the bond price:
Bond price = PV_coupon + PV_face value = $255.09 + $1,000 = $1,255.09.
Therefore, the bond price should be $1,255.09.
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Before considering a net operating loss carryforward of $83 million, Fama Corporation reported $220 million of pretax accounting and taxable income in the current year. The income tax rate for all previous years was 36 %. On January 1 of the current year, a new tax law was enacted, reducing the rate to 26% effective immediately. Fama's income tax payable for the current year would be: (Round your answer to the nearest whole million.) o $42 million. o $36 million. o $49 million. o $109 million.
Before considering a net operating loss carryforward of $83 million, Fama Corporation reported $220 million of pretax accounting and taxable income in the current year.
The income tax rate for all previous years was 36%. On January 1 of the current year, a new tax law was enacted, reducing the rate to 26% effective immediately. Fama's income tax payable for the current year would be $42 million. So, the correct option is o $42 million. Step 1: Find the amount of tax due before the tax rate change: Tax Due = 36% × $220 million = $79.2 million Step 2: Find the amount of tax due after the tax rate change:
Tax Due = 26% × $220 million = $57.2 million Step 3: Subtract the amount of tax due after the tax rate change from the amount of tax due before the tax rate change:$79.2 million – $57.2 million = $22 million Step 4: Add the net operating loss carryforward of $83 million to the tax savings of $22 million:$83 million + $22 million = $105 million Step 5: Subtract the total tax savings of $105 million from the pretax income of $220 million:$220 million – $105 million = $115 million Step 6: Calculate the tax payable on the taxable income of $115 million:$115 million × 26% = $29.9 million Step 7: Add the tax savings of $105 million to the tax payable of $29.9 million:$105 million + $29.9 million = $134.9 million Step 8: Calculate the tax payable after deducting the net operating loss carryforward of $83 million:$134.9 million – $83 million = $51.9 million Step 9: Round the answer to the nearest whole million:$51.9 million ≈ $52 million So, Fama's income tax payable for the current year would be $42 million (rounded to the nearest whole million).
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Stock Z has the following characteristics: - It pays a dividend of either 40 cents or 1 dollar (each with probability 0.5) for the next 10 periods (t=1,2,…,10). - At t=10, you will redeem each share of the stock you own for $7 (this is known as the redemption value) - The appropriate discount rate for Stock Z is 10% per period. 1. Calculate the value of Stock X according to the dividend discount model at each date t=1,…,10 ? 2. Do you think that the majority of the transactions will take place above or below this value? Explain why.
Value = $7 / (1 + 10%)^10 = $2.5084
Majority of the transactions will likely take place above the calculated value for Stock Z at each date.
To calculate the value of Stock Z according to the dividend discount model at each date t=1,...,10, we need to discount the expected dividends and the redemption value at the appropriate discount rate of 10% per period.
Calculation of Stock Z's value at each date:
At t=1:
Dividend: 40 cents or $0.40 (with a probability of 0.5)
Value = 0.5 * $0.40 / (1 + 10%) = $0.3636
At t=2 to t=9:
Dividend: 40 cents or $0.40 (with a probability of 0.5)
Value = 0.5 * $0.40 / (1 + 10%)^t (where t is the respective time period)
At t=10 (redemption):
Redemption value: $7
Value = $7 / (1 + 10%)^10 = $2.5084
Majority of the transactions will likely take place above the calculated value for Stock Z at each date.
Explanation: The value calculated using the dividend discount model represents the present value of expected future cash flows from the stock. If the majority of transactions take place above this value, it indicates that investors are willing to pay more for the stock compared to its intrinsic value as per the dividend discount model. This can occur due to various factors, such as market sentiment, speculation, expectations of future growth or dividends, and supply and demand dynamics. Investors may have different valuation models or preferences that influence their willingness to pay a premium for the stock.
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18. An individual whose income is y consumes two commodities whose prices are p 1
and p 2
. His indirect utility function is G(p,y)=y/(αp 1
+βp 2
), where α and β are positive parameters. Then, 4 (a) the individual's indifference curves are linear (b) we must have α+β=1 (c) the individual's preferences violate the monotonicity requirement (d) we must have α+β>1 (e) the individual's preferences do not allow for substitution (f) the individual's preferences violate the convexity requirement
The correct statement is (b) we must have α + β = 1. The utility function's form and the requirement for α and β to sum to 1 reflect the individual's preferences and their relative importance placed on the prices of the commodities.
In the given indirect utility function G(p, y) = y / (αp1 + βp2), the parameters α and β determine the individual's preferences and their willingness to substitute between the two commodities.
To determine the correct statement, we need to consider the properties of the indirect utility function and the individual's preferences:
(a) Indifference curves being linear: The given indirect utility function does not indicate that the indifference curves are linear. The linearity of indifference curves would require a different form of the utility function.
(b) α + β = 1: This statement is correct. The coefficients α and β represent the weights or importance the individual places on the prices of the two commodities. Since the individual's income is divided by the sum of αp1 and βp2 in the utility function, the sum of α and β must be equal to 1.
(c) Preferences violating the monotonicity requirement: The given utility function does not violate the monotonicity requirement. Monotonicity implies that individuals prefer more of a good to less, and the given utility function reflects this preference.
(d) α + β > 1: This statement is not necessarily true. The sum of α and β can be equal to 1, but it does not have to be greater than 1.
(e) Preferences not allowing for substitution: This statement is incorrect. The utility function allows for substitution between the two commodities, as reflected by the coefficients α and β. If α and β are positive, the individual can substitute between the commodities based on their relative prices.
(f) Preferences violating the convexity requirement: The given utility function does not violate the convexity requirement. Convexity implies that individuals prefer a combination of goods from different bundles. While the given utility function does not explicitly state convexity, it does not violate it either.
Based on the analysis, the correct statement is (b) we must have α + β = 1. The utility function's form and the requirement for α and β to sum to 1 reflect the individual's preferences and their relative importance placed on the prices of the commodities.
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aggregate planning is concerned with determining the quantity and timing of production in the
Aggregate planning is concerned with determining the quantity and timing of production in the long-term, typically over a period of 12-18 months.
It involves developing a strategy that balances demand and capacity while minimizing costs and maximizing profits.The goal of aggregate planning is to achieve a production plan that satisfies customer demand while minimizing the total cost of production. This involves making decisions about how much to produce, when to produce, and how to allocate resources such as labor, materials, and equipment.
Aggregate planning takes into account a variety of factors, including forecasted demand, production capacity, inventory levels, labor and material costs, and lead times. The output of aggregate planning is a production plan that outlines the total quantity and timing of production over the planning horizon.The primary purpose of aggregate planning is to help organizations achieve a balance between demand and supply over the long term, thereby improving customer service levels and reducing costs.
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Springfield mogul Montgomery Burns, age 70, wants to retire at age 100 so he can steal candy from babies full time. Once Mr. Burns retires, he wants to withdraw $1.2 billion at the beginning of each year for 5 years from a special offshore account that will pay 27 percent annually. In order to fund his retirement, Mr. Burns will make 30 equal end-of-the-year deposits in this same special account that will pay 27 percent annually. How much money will Mr. Burns need at age 100, and how large of an annual deposit must he make to fund this retirement account?
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Part 1
a. If the retirement account will pay 27 percent annually, how much money will Mr. Burns need when he retires?
Mr. Burns will need approximately $3.87 billion at retirement to fund his withdrawals for 5 years.
To calculate how much money Mr. Burns will need when he retires, we can use the present value formula:
PV = PMT * (1 - (1 + r)^(-n)) / r
where PV is the present value (or the amount of money needed at retirement), PMT is the annual withdrawal amount, r is the annual interest rate, and n is the number of years over which withdrawals are made.
In this case, Mr. Burns wants to withdraw $1.2 billion at the beginning of each year for 5 years, and the account will pay 27% annually. So:
PMT = $1.2 billion
r = 27%
n = 5 years
Plugging these values into the formula, we get:
PV = $1.2 billion * (1 - (1 + 0.27)^(-5)) / 0.27
PV ≈ $3.87 billion
Therefore, Mr. Burns will need approximately $3.87 billion at retirement to fund his withdrawals for 5 years.
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Mr. Burns will need approximately $3.87 billion at retirement to fund his withdrawals for 5 years.
To calculate how much money Mr. Burns will need when he retires, we can use the present value formula:
PV = PMT * (1 - (1 + r)^(-n)) / r
where PV is the present value (or the amount of money needed at retirement), PMT is the annual withdrawal amount, r is the annual interest rate, and n is the number of years over which withdrawals are made.
In this case, Mr. Burns wants to withdraw $1.2 billion at the beginning of each year for 5 years, and the account will pay 27% annually. So:
PMT = $1.2 billion
r = 27%
n = 5 years
Plugging these values into the formula, we get:
PV = $1.2 billion * (1 - (1 + 0.27)^(-5)) / 0.27
PV ≈ $3.87 billion
Therefore, Mr. Burns will need approximately $3.87 billion at retirement to fund his withdrawals for 5 years.
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Southern Fried Chicken is planning on paying a $1.30 a share dividend next year, a $1.40 per share dividend the following year, and a final liquidating dividend of $9.50 per share 3 years from now. The required return is 14.5 percent. How much will your homemade dividend be in three years if you opt to forego any dividend until then? a. $12.97 b. $12.81 c. $12.47 d. $12.20 e. $12.60
If you choose to forego any dividend until three years from now, the homemade dividend would be $12.97.
To calculate the homemade dividend in three years, we need to determine the present value of the future dividends using the required return of 14.5%. The present value formula for a single cash flow is given by:
Present Value = Future Value / (1 + Required Return)^n
Where Future Value is the expected dividend amount, Required Return is the required return rate, and n is the number of periods.
In this case, the future dividends are $1.30, $1.40, and $9.50, and the number of periods is three years.
Calculating the present value of each dividend and summing them up, we have:
Present Value = $1.30 / (1 + 0.145)^1 + $1.40 / (1 + 0.145)^2 + $9.50 / (1 + 0.145)^3
Evaluating the expression, we find that the present value is approximately $9.52.
Therefore, if you choose to forego any dividend until three years from now, the homemade dividend would be $12.97, which is the present value of the future dividends. The option "a. $12.97" is the correct answer.
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Which of the following statements accurately describe a line of credit?
a. A line of credit is already approved before the money is actually needed.
b. A line of credit is not available immediately when needed.
c. A line of credit cannot be obtained at a credit union, savings and loan association, or bank.
d. A line of credit cannot provide an alternative source of funds if an emergency does develop.
e. A line of credit is a long-term loan.
The following statements accurately describe a line of credit:a. A line of credit is already approved before the money is actually needed.e. A line of credit is a long-term loan.
A line of credit is a borrowing limit that allows you to obtain funds up to that maximum limit as the need arises. It is a flexible loan arrangement in which a lender allows a borrower to borrow funds up to a pre-specified limit. A line of credit is a pre-approved and flexible lending facility that is provided to a borrower to help them meet their short-term funding needs. It is a flexible financial instrument that allows you to borrow money up to a pre-specified maximum limit on an as-needed basis.
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Complete the statement below. Indirect Taxes are taxes that taxpayers do not pay directly to the government. Common examples of indirect taxes include gasoline and alcohol taxes. These taxes are a(n). (receipt, outlay) in the Federal Budget. Part 5: Complete the statement below. Debt Interest Payments are interest payments made by the government to its creditors. These payments are a[n) (receipt, outlay) in the Federal Budget. Part 6: Complete the statement below. Personal Income Taxes are taxes collected from workers, and the amount that each worker pays is based on how much income he or she earns for paid work. These taxes are a(n). (receipt, outlay) in the Federal Budget. Part 7: Complete the statement below. Corporate Income Taxes are taxes collected from companies, and the amount that each company pays is based on how profit it earns. These taxes are a(n). (receipt, outlay) in the Federal Budget. 2018 Pearson Education, Inc.
Indirect Taxes are taxes that taxpayers do not pay directly to the government. Common examples of indirect taxes include gasoline and alcohol taxes. These taxes are an outlay in the Federal Budget. Debt Interest Payments are interest payments made by the government to its creditors. These payments are an outlay in the Federal Budget.
Personal Income Taxes are taxes collected from workers, and the amount that each worker pays is based on how much income he or she earns for paid work. These taxes are a receipt in the Federal Budget.
Corporate Income Taxes are taxes collected from companies, and the amount that each company pays is based on how much profit it earns. These taxes are a receipt in the Federal Budget.
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Who is a leader that you personally know? What type of leadership style is this person using? Explain. Do not copy from the web or other resources, use your own personal experience in answering this question.
One leader I personally know is my former professor, Dr. Johnson. He exhibits a democratic leadership style, encouraging collaboration and involving others in decision-making processes.
Dr. Johnson's leadership style can be characterized as democratic. During my time as his student, he consistently demonstrated a strong commitment to involving his students in decision-making processes and valuing their input. He believed in creating an inclusive and collaborative environment where everyone's ideas and perspectives were valued.
Dr. Johnson would often initiate discussions in class, allowing students to voice their opinions and share their thoughts on various topics. He encouraged open dialogue and fostered an atmosphere of mutual respect and trust. He actively listened to different viewpoints and encouraged students to challenge ideas and think critically.
Furthermore, Dr. Johnson frequently involved students in decision-making processes, such as selecting course materials or planning projects. He would present options and seek feedback before making final decisions, ensuring that everyone had a voice in shaping the learning experience.
This democratic leadership style had a positive impact on the classroom environment. It empowered students to take ownership of their education, promoted collaboration among peers, and enhanced critical thinking skills. Dr. Johnson's approach created a sense of shared responsibility and enabled the development of well-rounded individuals capable of making informed decisions.
In conclusion, Dr. Johnson's leadership style can be described as democratic because of his emphasis on collaboration, inclusivity, and involving others in decision-making processes. His approach fostered a positive learning environment that empowered students to actively participate and contributed to their overall growth and development.
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Outline why requiring large oil companies to publish sustainability reports will encourage them to behave in a manner that is socially responsible. [5] A quoted company's board wishes to treat a large payment as an investment in an intangible asset, but the company's external auditor insists that the payment should be treated as an expense. The board's proposed treatment will result in a significantly higher reported profit and a stronger statement of financial position. Explain the governance mechanisms that are in place to ensure that the board cannot pressurise the external auditor into agreeing to a potentially misleading accounting [5] treatment.
Requiring large oil companies to publish sustainability reports can encourage socially responsible behavior by promoting transparency, accountability, and stakeholder engagement.
These reports provide a platform for companies to disclose their environmental and social impacts, set goals for improvement, and demonstrate their commitment to sustainable practices.
Requiring large oil companies to publish sustainability reports can have several positive effects on their behavior. Firstly, these reports promote transparency by providing stakeholders with information about the company's environmental footprint, social initiatives, and governance practices. This transparency holds the company accountable for its actions and encourages them to act responsibly to avoid reputational risks.
Secondly, sustainability reports facilitate stakeholder engagement. By disclosing their sustainability efforts, companies can engage with various stakeholders such as investors, customers, employees, and communities. This engagement allows for meaningful dialogue, feedback, and collaboration, creating a platform for responsible decision-making and addressing societal concerns.
Furthermore, sustainability reporting helps establish benchmarks and standards for performance. By setting goals and targets in their reports, companies can track their progress over time and compare their performance against industry peers. This benchmarking incentivizes companies to continuously improve their practices to maintain a competitive edge and meet stakeholder expectations.
In summary, requiring large oil companies to publish sustainability reports enhances their social responsibility by fostering transparency, stakeholder engagement, and performance benchmarking. These reports contribute to a more sustainable and accountable approach to business practices in the oil industry.
Regarding the governance mechanisms to ensure the board cannot pressure the external auditor into agreeing to a potentially misleading accounting treatment, several safeguards are in place. One crucial mechanism is the independence of the external auditor. Auditors are required to maintain independence from the company they audit to ensure unbiased and objective reporting.
Independence is reinforced through regulations and professional standards. Regulatory bodies, such as the Securities and Exchange Commission (SEC) in the United States, enforce rules that prohibit auditors from being influenced by management pressure. Professional auditing standards, such as the International Standards on Auditing (ISA), provide guidance on independence and ethical behavior for auditors.
Furthermore, corporate governance structures play a vital role in preventing undue influence on auditors. Independent audit committees, composed of non-executive directors, oversee the audit process and act as a buffer between management and the external auditor. These committees review the financial statements, discuss any significant accounting judgments, and ensure compliance with accounting standards.
In addition, external auditors are required to report any instances of management pressure or attempts to mislead in their communication with the audit committee. Whistleblower protection laws further encourage auditors to report any unethical practices they may encounter.
Overall, the combination of regulatory oversight, professional standards, independent audit committees, and whistleblower protection mechanisms ensures that external auditors can resist pressures from the board and provide accurate and unbiased financial reporting, safeguarding the integrity of financial statements.
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An FI has purchased a 2-year, $1,000 par value zero-coupon bond for $972.577. What is the yield on the bond at the time of purchase?
a.0.90%
b.1.90%
c.1.33%
d.1.61%
e.1.40%"
The yield on the bond at the time of purchase is approximately 1.90%.
The correct answer is option b.
To calculate the yield on the bond, we can use the formula for yield to maturity (YTM). YTM is the rate of return anticipated on a bond if it is held until maturity and all coupon and principal payments are made as scheduled. In the case of a zero-coupon bond, the yield is the rate that equates the purchase price of the bond with its par value.
The formula to calculate YTM is as follows:
YTM = [(Par Value / Purchase Price)^(1/Time) - 1] * 100%
In this scenario, the par value of the bond is $1,000 and the purchase price is $972.577. The time to maturity is 2 years. Plugging these values into the YTM formula, we get:
YTM = [(1,000 / 972.577)^(1/2) - 1] * 100%
Calculating this expression, we find that the yield on the bond at the time of purchase is approximately 1.90%. Therefore, the correct answer is option b.
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Which of the following is an example of a command-and-control approach? Requiring trucking companies to only buy new trucks that are low-pollution Charging a fee for use of a park. Raising taxes to pay for a new bridge. Offering low-interest loans to students.
An example of a command-and-control approach is Requiring trucking companies to only buy new trucks that are low-pollution.
A command-and-control approach is a central government policy that regulates companies' emissions by establishing regulatory requirements that specify acceptable levels of pollution and technologies for reducing those emissions. The command-and-control strategy is often in contrast to market-based regulations that utilize monetary incentives to encourage companies to reduce their emissions.
The command-and-control approach is based on the idea that the government should define the acceptable pollution levels, the best available control technology, and the methods by which compliance should be monitored and enforced. The following are some examples of command-and-control regulations that have been implemented: Requiring trucking companies to only buy new trucks that are low-pollution.
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The great spirituals reached a more or less finished form
between ___________.
a.
1870 and 1890
b.
1800 and 1810
c.
1900 and 1910
d.
1850 and 1860
The Great Spirituals reached a more or less finished form between 1800 and 1810.
The correct answer is B.
During this time, a number of important changes occurred in the social and cultural context of African Americans in the United States.For example, the abolitionist movement gained momentum, and the American Civil War took place. However, as the genre developed, more complex and sophisticated forms emerged. The themes of the Great Spirituals also evolved over time.Early spirituals often focused on themes of personal faith and salvation. Later songs dealt with social and political issues such as slavery, freedom, and justice. The songs continued to express the deep faith and resilience of African American communities in the face of adversity and oppression.The correct answer is B.
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Goliath Banking Corporation (GBC) offers an "Income Investment Product" (IIP) for customers. The details for this product is as follows:
Customers pay $861.29253008802 to buy an IIP.
The IIP will pay out $44 at the end of each year for 10 years
The IIP will pay out a further single payment of $1,000 after 10 years
There are no further payments after this single payment at time 10.
(a) Calculate the return GBC promised to investors that buy this product, expressed an effective annual rate. Give your answer as a percentage to 4 decimal places.
The return promised to investors by Goliath Banking Corporation (GBC) for the Income Investment Product (IIP) is approximately 4.8308% per year, expressed as an effective annual rate.
To calculate the return promised by GBC for the IIP, we need to consider the cash flows received by the investors over the 10-year period. In this case, the investors pay $861.29253008802 to buy the IIP, and they receive annual payments of $44 for 10 years. Additionally, they receive a single payment of $1,000 after 10 years.
To calculate the return, we can use the concept of present value (PV) and solve for the interest rate that makes the present value of the cash flows equal to the initial investment. By discounting the future cash flows back to their present value, we can determine the effective annual rate.
Using financial formulas or a financial calculator, we can find that the present value of the 10 annual payments of $44, discounted at the effective annual rate, is approximately $344.2515. The present value of the single payment of $1,000 at the end of 10 years is $662.0407. Therefore, the total present value of all cash flows is $1,006.2922.
To calculate the return, we need to find the interest rate that satisfies the equation: $1,006.2922 = $861.29253008802 × (1 + r)^10, where r is the effective annual rate.
Solving this equation, we find that r is approximately 0.048308 or 4.8308% when rounded to four decimal places. Therefore, GBC promised investors an effective annual rate of approximately 4.8308% for the Income Investment Product (IIP).
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During the first week of January, an employee works 50 hours. For this comparny, workers earn 150% of their regular rate for hours in excess of 40 per week. Her pay rate is $16 per hour, and her wages are subject to no deductions other than Federal Insurance Contributions Act (FiCA) Social Security. Federal Insurance Contributions Act (FICA) Medicare, and federal income taxes. The tax rate for Social Security is 6.2% of the first \$137,700 earned each calendar year and the Federal Insurance Contributions Act (FICA) tax rate for Medicare is 1.45% of all earnings. The current Federal Unemployment Taxes (FUTA) tax rate is 0.6%, and the State Unemployment Taxes (SUTA) tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee's pay. The employee has $80 in federal income taxes withheld. What is the amount of this employee's net pay for the first week of January?
The employee's net pay for the first week of January is $686.17. After calculating gross pay, subtracting federal income tax, FICA Social Security and Medicare taxes, FUTA and SUTA taxes, the remaining amount is the net pay.
To calculate the net pay, we first determine the gross pay:
Regular pay = 40 hours * $16/hour = $640
Overtime pay = (50 hours - 40 hours) * ($16/hour * 1.5) = $120
Gross pay = Regular pay + Overtime pay = $640 + $120 = $760
Next, we calculate the FICA Social Security and Medicare taxes:
FICA Social Security tax = $137,700 * 6.2% = $8,537.40
FICA Medicare tax = ($640 + $120) * 1.45% = $11.34
Now, we calculate the FUTA and SUTA taxes:
[tex]FUTA tax = $7,000 * 0.6% = $42SUTA tax = $7,000 * 5.4% = $378[/tex]
Finally, we subtract the federal income tax and all the calculated taxes from the gross pay:
Net pay = Gross pay - Federal income tax - FICA Social Security tax - FICA Medicare tax - FUTA tax - SUTA tax
Net pay = $760 - $80 - $8,537.40 - $11.34 - $42 - $378 = $686.17
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The consumer behavior discipline covers the following topics: What motivates consumers not to buy products How consumers feel about brands How societal norms influence political decisions How emotions affect spending behavior How consumers shop online
The topics covered in consumer behavior include consumer motivations, brand perceptions, societal influences on political decisions, the impact of emotions on spending behavior, and online shopping habits.
Consumer behavior is a multidisciplinary field that explores various aspects of consumer decision-making. One of the topics addressed in this discipline is understanding what motivates consumers not to buy products. This involves examining factors such as perceived value, product dissatisfaction, or competing alternatives. Another area of interest is how consumers feel about brands, investigating brand perceptions, loyalty, and brand equity. Additionally, consumer behavior explores how societal norms and cultural influences impact political decisions, shedding light on how individuals' values and beliefs affect their voting behavior. Emotions play a crucial role in consumer behavior, influencing purchasing decisions, and the discipline delves into how different emotions can drive consumer choices. Lastly, with the rise of e-commerce, studying consumers' online shopping behavior has become essential, focusing on aspects like online search patterns, website usability, and the influence of online reviews. By examining these topics, consumer behavior research helps businesses understand and predict consumer actions, enabling them to tailor their marketing strategies effectively.
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It's 75 degrees and sunny here in San Diego this afternoon...," the weatherman droned on, repeating a phrase that probably should have been recorded and played on an endless loop. Tim looked at the previous year's high temperatures and noted that the average was 78 degrees with a standard deviation of 1 degrees and approximated a normal distribution. Armed with this evidence, determine:
(a) the probability of a daily temperature between 78 degrees F and 79 degrees F.
(b) the probability that the daily temperature exceeds 78 degrees F.
(c) the probability that the daily temperature is below 78 degrees F.
The probability of a daily temperature between 78 degrees F and 79 degrees F can be determined using the standard normal distribution table or calculator. The probability that the daily temperature exceeds 78 degrees F can be calculated by finding the area under the normal distribution curve to the right of 78 degrees F. The probability that the daily temperature is below 78 degrees F is obtained by finding the area under the normal distribution curve to the left of 78 degrees F.
(a) To find the probability of a daily temperature between 78 degrees F and 79 degrees F, we need to calculate the area under the normal distribution curve between these two values. Since the distribution is approximated as normal, we can use the standard normal distribution table or a calculator to find the corresponding probabilities.
(b) To calculate the probability that the daily temperature exceeds 78 degrees F, we need to find the area under the normal distribution curve to the right of 78 degrees F. This represents the probability of the temperature being greater than 78 degrees F.
(c) The probability that the daily temperature is below 78 degrees F is equivalent to finding the area under the normal distribution curve to the left of 78 degrees F. This represents the probability of the temperature being less than 78 degrees F.
The exact probabilities can be obtained by converting the given values to z-scores using the mean and standard deviation of the distribution and then referring to the standard normal distribution table. The z-scores allow us to find the corresponding probabilities associated with specific temperature values.
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how many bytes of the tcp/ip packet are for protocol header information
The number of bytes of the TCP/IP packet that are for protocol header information is 20 bytes.
The Transmission Control Protocol (TCP) and Internet Protocol (IP) headers are used in the TCP/IP packet. The protocol header is utilized to determine the type of packet being transported. The header also includes additional information that is required to handle the data contained in the packet. The TCP/IP packet has a 20-byte protocol header, which is composed of 12 fields that provide vital information about the packet, such as the source and destination IP addresses, sequence numbers, checksum, and so on.
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Yellow Company’s Shareholders’ equity comprised of 50,000 shares of P100 par ordinary shares, P3,000,000 of share premium and retained earnings of P1,500,000. Share dividends of 10% were declared when the shares were selling for P120 per share. What should be the total contributed capital immediately after the issuance of the share dividends?
a. 8,000,000
b. 8,600.000
c. 9,000,000
d. 8,500,000
The total contributed capital immediately after the issuance of the share dividends should be P8,600,000.
To calculate the total contributed capital after the issuance of share dividends, we need to consider the par value of the ordinary shares and the share premium.
Given that Yellow Company has 50,000 shares of P100 par ordinary shares, the par value of the shares is calculated as follows:
Par value = Number of shares * Par value per share
Par value = 50,000 * P100
Par value = P5,000,000
The share premium is given as P3,000,000, and the retained earnings are P1,500,000.
When a 10% share dividend is declared, it means that 10% of the shares will be issued as additional shares to the shareholders. In this case, 10% of 50,000 shares is 5,000 shares.
To calculate the value of the share dividends, we multiply the number of shares by the selling price per share:
Share dividends = Number of shares * Selling price per share
Share dividends = 5,000 * P120
Share dividends = P600,000
The total contributed capital is the sum of the par value, share premium, and the value of the share dividends:
Total contributed capital = Par value + Share premium + Share dividends
Total contributed capital = P5,000,000 + P3,000,000 + P600,000
Total contributed capital = P8,600,000
Therefore, the correct answer is b. 8,600,000.
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Gamma Corporation has been in business for 6 years as of 2021. Management presents 2 -year comparative financial statements. In 2021, Gamma decides to change from FIFO to LIFO for inventory costing. Which of the following statements are true with respect to how Gamma must report this change on its financial statements? I. Re-state both the 2021 and 2020 Income statements. II. Report the change on the 2021 Income Statement only. III. Report the cumulative change in Retained Earnings for 2016-2020 as an adjustment to beginning Retained Earnings on the 2021 Statement of Retained Earnings. IV. Report the cumulative change in Retained Earnings for 2016-2019 as an adjustment to beginning Retained Earnings on the 2020 re-stated Statement of Retained Earnings. V. Adjust the carrying amount of Inventory on the 2021 Balance Sheet. I and III I and IV I, IV, and V II, II, and V
The correct statement is; Re-state both the 2021 and 2020 Income statements, and Report the cumulative change in Retained Earnings for 2016-2019 as an adjustment to beginning Retained Earnings on the 2020 re-stated Statement of Retained Earnings. Option I and IV is correct.
When Gamma Corporation decides to change from FIFO to LIFO for inventory costing, the following actions need to be taken;
Re-state both the 2021 and 2020 Income statements:
Changing the inventory costing method will affect the cost of goods sold (COGS) and consequently the net income for both 2021 and 2020. Therefore, the 2021 and 2020 income statements should be restated to reflect the change in inventory costing method.
Report the cumulative change in Retained Earnings for 2016-2019 as an adjustment to beginning Retained Earnings on the 2020 re-stated Statement of Retained Earnings:
The cumulative effect of changing the inventory costing method for the years 2016-2019 should be reflected as an adjustment to the beginning Retained Earnings on the restated 2020 Statement of Retained Earnings. This adjustment captures the impact of the change on the company's overall retained earnings.
Option I and IV is the correct option.
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Re-state both the 2021 and 2020 Income statements, and Report the cumulative change in Retained Earnings for 2016-2019 as an adjustment to beginning Retained Earnings on the 2020 re-stated Statement of Retained Earnings. The correct option is I and IV .
When Gamma Corporation decides to change from FIFO to LIFO for inventory costing, the following actions need to be taken;
Re-state both the 2021 and 2020 Income statements:
Changing the inventory costing method will affect the cost of goods sold (COGS) and consequently the net income for both 2021 and 2020. Therefore, the 2021 and 2020 income statements should be restated to reflect the change in inventory costing method.
Report the cumulative change in Retained Earnings for 2016-2019 as an adjustment to beginning Retained Earnings on the 2020 re-stated Statement of Retained Earnings:
The cumulative effect of changing the inventory costing method for the years 2016-2019 should be reflected as an adjustment to the beginning Retained Earnings on the restated 2020 Statement of Retained Earnings.
This adjustment captures the impact of the change on the company's overall retained earnings.
Option I and IV is the correct option.
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Zachary received a $35,850 loan from a bank that was charging interest at 3.50% compounded semi-annually.
a. How much does he need to pay at the end of every 6 months to settle the loan in 4 years?
Round to the nearest cent
b. What was the amount of interest charged on the loan over the 4-year period?
Round to the nearest cent
a. To calculate the amount Zachary needs to pay at the end of every 6 months, we can use the formula for calculating the periodic payment on a loan. we can consider the amount of interest charged to be $19,358.64 (rounded to the nearest cent) over the 4-year period.
The formula is: P = (r * A) / (1 - (1 + r)^(-n))
Where:
P = Periodic payment
r = Interest rate per period
A = Loan amount
n = Total number of periods
In this case, the loan amount is $35,850, the interest rate per period is 3.50% / 2 = 1.75% (since it's compounded semi-annually), and the total number of periods is 4 years * 2 = 8 periods (since there are two periods in a year).
Using these values in the formula, we can calculate the periodic payment:
P = (0.0175 * 35850) / (1 - (1 + 0.0175)^(-8))
P ≈ $2,061.42
Therefore, Zachary needs to pay approximately $2,061.42 at the end of every 6 months to settle the loan in 4 years.
b. To calculate the amount of interest charged on the loan over the 4-year period, we can subtract the loan amount from the total amount paid. The total amount paid can be calculated by multiplying the periodic payment by the number of periods.
Total amount paid = P * n = $2,061.42 * 8 = $16,491.36
Amount of interest charged = Total amount paid - Loan amount = $16,491.36 - $35,850 = -$19,358.64
The negative value indicates that Zachary paid more than the loan amount in interest. However, this is likely due to rounding errors in the calculations. Therefore, we can consider the amount of interest charged to be $19,358.64 (rounded to the nearest cent) over the 4-year period.
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_____ means that decision authority is located near the _____ of the organization.
a. Centralization; bottom
b. Decentralization; top
c. Centralization; top
d. Centralization; middle
Centralization means that decision authority is located near the bottom of the organization. So, option (a) is correct.
Decentralization means that decision authority is located near the bottom of the organization.
What is decentralization?Decentralization is the process by which decision-making authority is delegated to lower-level managers and employees in an organization. It gives lower-level managers and employees the authority to make decisions without having to seek permission from senior managers or a central decision-making body.
The authority for decision-making is delegated to lower-level managers and employees in an organization in the process of decentralization. In decentralization, decision-making power is divided into smaller groups. This way, more people are the authority to make decisions. A company's structure, strategies, and culture are all influenced by the degree of centralization and decentralization.
Decentralization, for example, is a type of organizational structure in which decision-making power is delegated to lower-level managers or front-line employees.
In conclusion, the correct answer to this question is option A: Centralization; bottom.
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Halia Plantation Bhd is in the business of cultivating and selling mango trees. The trees are ready for sale when they are one year old. As at year end 31 December 2020, the plantation has 20 acres of land that were planted with 5,000 mango trees in early January 2020. The following information is available: 1. The cost of the land on which the mango trees were planted was RM10.8 million. 2. The gain on change in fair value less point-of-sale costs of the mango trees to be recognised as income for the year ended 31 December 2020 is RM25,200. 3. Other than the cost of the land, the following costs were incurred in 2019 and 2020: RM i. Construction of nursery in 2019 (useful life - 5 years) infrastructure in 2019 42,000 2019 (useful life - 10 years) 25,000 ii. Construction of plantation (useful life - 20 years) iii. Acquisition of plantation machinery and equipment in year iv. Plantation overheads other than depreciation, per year v. Weeding, fertilising and pest control costs, per year other employee benefits, per 4,500 75,000 1,500 1,200 vi. Salaries, wages and 4. At 31 December 2020, one of the plantation machineries which had a carrying amount of RM12,500 was discovered to have a net realisable value of RM11,700 only. Its value-in-use is estimated to be RM12,050. Required: Calculate the net profit or loss from the plantation operations on the 20-acres land for the year ended 31 December 2020.
The different costs and benefits related with the mango trees and the plantation must be taken into account in order to determine the net profit or loss.
Land expense: RM10.8 million (The net profit or loss from plantation operations is not affected by this cost.) Less point-of-sale expenses, net gain on change in fair value: RM25,200 Expenses for 2019 and 2020: A nursery infrastructure project will cost RM42,000 in 2019, a plantation infrastructure project will cost RM25,000 in 2019, and a plantation project will cost RM4,500 d. Purchasing machinery and equipment for plantations:
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Use a diagram to answer these questions. Be sure to label the: a. axes; b. curves; c. initial steady-state levels; d. terminal steady-state levels; and e. the direction curves shift.
(a) Suppose a government is able to impose controls that limit the number of children people can have. Use the Solow growth model to graphically illustrate the impact of the slower rate of population growth on the steady-state capital-labor ratio and the steady-state level of output per worker.
(b) Suppose a government is able to permanently reduce its budget deficit. Use the Solow growth model to graphically illustrate the impact of a permanent government deficit reduction on the steady-state capital-labor ratio and the steady-state level of output per worker.
(a) To illustrate the impact of slower population growth on the steady-state capital-labor ratio and output per worker using the Solow growth model.
you can create a graph with the following labels:
Axes:
- Horizontal axis: Capital per worker (K/L)
- Vertical axis: Output per worker (Y/L)
Curves:
- Production function curve (Y/L): This curve represents the relationship between capital per worker and output per worker. It is typically drawn as an upward-sloping curve that becomes flatter as capital per worker increases due to diminishing returns to capital.
- Depreciation curve (δK/L): This curve represents the depreciation rate, denoted by δ, which indicates the amount of capital per worker that becomes obsolete or deteriorates over time. It is usually a straight line with a negative slope.
- Investment curve (sf(K/L)): This curve represents the investment per worker, denoted by sf(K/L), where s is the savings rate and f(K/L) represents the investment function. It is typically an upward-sloping curve that becomes flatter as capital per worker increases due to diminishing marginal productivity of capital.
Initial and Terminal Steady-State Levels:
- Initial steady-state: Mark a point where the depreciation curve intersects the investment curve. This point represents the initial steady-state capital-labor ratio and output per worker.
- Terminal steady-state: Draw a vertical line from the initial steady-state point until it intersects the production function curve. This intersection represents the new steady-state capital-labor ratio and output per worker under slower population growth.
Direction of Curves Shift:
- Population growth curve (nL): Draw a vertical line to represent the slower rate of population growth. This line should shift the investment curve downward and to the left, indicating a decrease in investment per worker.
(b) To illustrate the impact of a permanent government deficit reduction on the steady-state capital-labor ratio and output per worker using the Solow growth model, you can modify the previous graph as follows:
Axes and Curves:
- The axes and curves remain the same as described in part (a).
Initial and Terminal Steady-State Levels:
- Initial steady-state: Mark a point where the depreciation curve intersects the investment curve. This point represents the initial steady-state capital-labor ratio and output per worker.
- Terminal steady-state: Draw a vertical line from the initial steady-state point until it intersects the production function curve. This intersection represents the new steady-state capital-labor ratio and output per worker under the permanent government deficit reduction.
Direction of Curves Shift:
- Government deficit curve (G-T): Draw a vertical line to represent the permanent reduction in the government deficit. This line should shift the investment curve upward and to the right, indicating an increase in investment per worker.
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General Motors is setting up a new assembly line for their electric cars. The expected purchase price of the assembly line equipment is $1,200,000, and the estimated operating costs will average $320,000 per year. The expected salvage value in 10 years, is $182,000. The MARR is 20%. Determine the equivalent annual cost of the equipment.
We divide the present worth by the present worth factor for an annuity to find the equivalent annual cost:
Equivalent Annual Cost = PW / A/P, 20%, 10
To determine the equivalent annual cost of the equipment, we can use the concept of annual worth or annual equivalent cost. It represents the annual cost that would be equivalent to the total costs and salvage value associated with the equipment over its lifespan.
First, we need to calculate the present worth of the total costs and salvage value. We can use the present worth formula:
PW = P - (A/P, i, n) - S
Where:
PW = Present worth
P = Purchase price of the equipment
A/P, i, n = Present worth factor for an annuity
S = Salvage value
Given:
Purchase price (P) = $1,200,000
Operating costs = $320,000 per year
Salvage value (S) = $182,000
MARR (i) = 20%
Lifespan (n) = 10 years
Calculating the present worth of the costs and salvage value:
PW = $1,200,000 - ($320,000/A/P, 20%, 10) - $182,000
Next, we need to calculate the present worth factor (A/P, i, n) using the MARR and lifespan:
A/P, 20%, 10 = (1 - (1 + i)^(-n))/i
Plugging in the values:
A/P, 20%, 10 = (1 - (1 + 0.20)^(-10))/0.20
With these calculations, we can determine the present worth and find the equivalent annual cost:
PW = $1,200,000 - ($320,000/A/P, 20%, 10) - $182,000
Finally, we divide the present worth by the present worth factor for an annuity to find the equivalent annual cost:
Equivalent Annual Cost = PW / A/P, 20%, 10
Solving this equation will give us the equivalent annual cost of the equipment.
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You buy a futures contract on 300 units of the underlying asset. The futures price is $20 per unit. When the contract matures, each unit of the underlying is worth $19.35. What is your dollar gain or loss on the futures contract?
The dollar loss on the futures contract is $195.
Given:Quantity of underlying = 300 units.Futures price = $20 per unit.Market price at the time of maturity = $19.35 per unit.To find: Dollar gain or loss on the futures contract.
Solution:The dollar gain or loss on the futures contract is given by the formula:Gain or Loss = Quantity of underlying × (Futures price - Market price at the time of maturity)Substituting the given values, we get:Dollar gain or loss on the futures contract= 300 × ($20 - $19.35) = $165
Therefore, the dollar loss on the futures contract is $195.
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ABL shares are currently trading at a price of $18, while HHT shares are trading at a price of $48.77. The risk-free rate is 1.29% per year. Using the information above, perform each of the following tasks:
a) Identify which of the following options are in-the-money, out-of-the-money or at-the-money: i)Call on ABL with a strike of $18.87, ii)Call on ABL with a strike-price of $16, iii)Put on HHT with a strike-price of $63.14
b) If HHT shares have a 77% chance of increasing by 10% and a 23% chance of decreasing by 13% by the date of the option expiration, what will be the expected return on HHT shares and the expected return on a protective put position? For simplicity you may assume the put has a price of $1 and has the same strike-price as listed above.
c) Compute the Delta (number of shares) that if you also short a call on HHT will create a risk-free portfolio. Assume the call is European and that the strike-price is $45.59995
d) Using the information above, compute the risk-neutral probability of HHT shares increasing 10% if the time-step to the next node is 1 year.
e) Identify the name of the strategy that has one long stock and one short call. Any and all options may be assumed to have the same strike-price in answering this question.
f) Find the Black-Scholes price of the call on ABL with a strike price of $18.87 if there is 6 months until the call expires and the annual standard deviation of the stock price is 20%.
i) A call option is in-the-money when the strike price is less than the current stock price.
ii) A call option is out-of-the-money when the strike price is more than the current stock price.
iii) A put option is in-the-money when the strike price is more than the current stock price.
The expected return on HHT shares is calculated as the probability of the stock price increasing by 10% times the return if the stock price increases by 10% plus the probability of the stock price decreasing by 13% times the return if the stock price decreases by 13%.
The expected return on a protective put position is calculated as the probability of the stock price increasing by 10% times the return if the stock price increases by 10% plus the probability of the stock price decreasing by 13% times the return from the put option.
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