Suppose the S&R index is 800, the continuously compounded risk-free rate is 5%, and the dividend yield is 0%. A 1-year 815-strike European call costs $75 and a 1- year 815-strike European put costs $45. Consider the strategy of buying the stock, selling the 815-strike call, and buying the 815-strike put. a. What is the rate of return on this position held until the expiration of the options? b. What is the arbitrage implied by your answer to (a)? c. What difference between the call and put prices would eliminate arbitrage? d. What difference between the call and put prices eliminates arbitrage for strike prices of $780, $800, $820, and $840?

Belstone, inc. is a merchandiser of stone ornaments. it sold 15,000 units during the year. the company has provided the following information: sales revenue $ 520,000 purchases (excluding freight in) 338,500 selling and administrative expenses 32,000 freight in 15,000 beginning merchandise inventory 43,000 ending merchandise inventory 58,500 how much is the gross profit for the year?

What is an example of a good stock to buy during economic expansion? a) cyclical stock b) defensive stock c) income stock d) bond

Stocks a, b, and c are similar in some respects: each has an expected return of 10% and a standard deviation of 25%. stocks a and b have returns that are independent of one another; i.e., their correlation coefficient, r, equals zero. stocks a and c have returns that are negatively correlated with one another; i.e., r is less than 0. portfolio ab is a portfolio with half of its money invested in stock a and half in stock b. portfolio ac is a portfolio with half of its money invested in stock a and half invested in stock c. which of the following statements is correct? a. portfolio ab has a standard deviation that is greater than 25%.b. portfolio ac has an expected return that is less than 10%.c. portfolio ac has a standard deviation that is less than 25%.d. portfolio ab has a standard deviation that is equal to 25%.e. portfolio ac has an expected return that is greater than 25%.