If a trader buys an option at an implied volatility of 10%, and plans to delta hedge it, over the life of the option she hopes realized volatility will be:

Answers

Answer 1

Answer:

b. lower than 10%

Explanation:

Missing word "a. higher than 10%, b. lower than 10%, c. if its three month option then she hopes its 10/3, d. irrelevant where realized will be"

If a trader buys an option at an implied volatility of 10%, and plans to delta hedge it, over the life of the option she hopes realized volatility will be lower than 10%. When hedging implied volatility through delta hedging is done, it means that the trader is expecting that volatility will decline and it has taken the position on the the downside of the implied volatility as it is reflected by the delta hedging. Delta hedging is not about betting on the upside of implied volatility.


Related Questions

In 2020, Sunland Corporation incurred research and development costs as follows: Materials and equipment $116000 Personnel 136000 Indirect costs 176000 $428000 These costs relate to a product that will be marketed in 2021. It is estimated that these costs will be recouped by December 31, 2023. The equipment has no alternative future use. What is the amount of research and development costs that should be expensed in 2020

Answers

Answer:

$428,000

Explanation:

The amount of research and development costs that should be expensed in 2020  is as calculated below

The amount of research and development costs = Materials and equipment cost + Personnel cost + Indirect costs

The amount of research and development costs = $116,000 + $136,000 + $176,000

The amount of research and development costs = $428,000

Joe plans to fund his individual retirement account (IRA) with the maximum contribution of $2,500 at the end of each year for the next 30 years. If Joe can earn 10 percent on his contributions, how much will he have at the end of the thirtieth year?
a. $411,235
b. $611,235.
c. $23,567.
d. $43,567.

Answers

Answer:

FV= $411,235.06

Explanation:

Giving the following information:

Annual deposit= $2,500

Number of periods= 30 years

Interest rate= 10%

To calculate the future value, we need to use the following formula:

FV= {A*[(1+i)^n-1]}/i

A= annual deposit

FV= {2,500*[(1.1^30) - 1]} / 0.1

FV= $411,235.06

Ann Chovies, owner of the Perfect Pasta Pizza Parlor, uses 20 pounds of pepperoni each day in preparing pizzas. Order costs for pepperoni are $10.00 per order, and carrying costs are 4 cents per pound per day. Lead time for each order is three days, and the pepperoni itself costs $3.00 per pound.
1. At what point should she re-order pepperoni?
a. 80 pounds remaining.
b. 40 pounds remaining.
c. 60 pounds.
d. 20 pounds.
e. 100 pounds.
2. If she were to order 80 pounds of pepperoni at a time, what would be the length of an order cycle?
a. 4 days.
b. 5 days.
c. 3 days.
d. 0 days.
e. .25 days.
3. If she were to order 80 pounds of pepperoni at a time, what would be the average inventory level?
a. 60 pounds.
b. 20 pounds.
c. 100 pounds.
d. 40 pounds.
e. 80 pounds.
4. If she were to order 80 pounds of pepperoni at a time, what would be the total daily costs, including the cost of the pepperoni?
a. $60.00.
b. $64.10.
c. $64.00.
d. $65.00.
e. $63.20.
5. What is the economic order quantity for pepperoni?
a. 40 pounds.
b. 80 pounds.
c. 100 pounds.
d. 20 pounds.
e. 60 pounds.

Answers

Answer and Explanation:

The computation is shown below;

1. Reorder point is

= Daily demand × lead ime

= 20 × 3 days

= 60 pounds

2. The length of the order cycle is

= Order quantity ÷ demand rate

= 80 ÷ 20 pounds

= 4 days

3. The average inventory level is

= Order quantity ÷ 2

= 80 ÷ 2

= 40 pounds

4. The total daily cost is

the cost of the pepperoni = daily demand × cost per pound

= 20 × 3 pound

= 60

Daily ordering cost is

= daily demand ÷ ordering quantity × ordering cost

= 20 ÷ 80 × $10

= $2.50

And, the daily holding cost is

= ordering cost ÷ 2 × holding cost

= 80 ÷ 2 × 0.04

= $1.60

Now the total daily cost is

= $60 + $2.50 + $1.60

= $64.10

5. The economic order quantity is

= (√2 × annual demand × ordering cost ÷ carrying cost)

= √2 × 20 × 10 ÷ 0.04

= √10,000

= 100

In what positive and negative ways has the Internet changed the conduct and coordination of global business?

Answers

Answer: Positive ways; Barriers in connecting is slightly no more, Negative ways; Increase in fraud and cyber theft

Explanation:

The internet has changed the conduct and cordination of global business in many ways both positively and negatively. Considering the positive ways

Positive Ways: Barriers in connecting is slightly no more: connecting to one another has been made easy to do business recently, people in continents can carry out a transaction and a trade under minutes of interaction and get the goods and services exchanged among each other immediately.

Negative ways; Increase in fraud and cyber theft; despite the swift nature of doing business now, it has also Increased fraud as some people disguise themselves to be traders and businessmen just to collect people's money.

Select the qualification that is best demonstrated in each example.
Vera is a High School Principal who sets a goal that more than half of the students from her high school will go on to
college in four years
Cedric is a Preschool Education Administrator who stays calm and patient even when dealing with parents who are
angry with one of the teachers in his school.
Jessie is a School District Administrator who manages the budget for a school district and decides how money will b
spent.
Kelly is a Middle School Principal who analyzes information about class sizes to decide how many teachers the
school will need the next year.
Intro
Done

Answers

Answer 1. Long term2.stress3.fiancé4.critical

Explanation:

Answer:

Vera is a High School Principal who sets a goal that more than half of the students from her high school will go on to college in four years

✔ long-term planning skills

Cedric is a Preschool Education Administrator who stays calm and patient even when dealing with parents who are angry with one of the teachers in his school.

✔ stress-management skills

Jessie is a School District Administrator who manages the budget for a school district and decides how money will be spent.

✔ finance skills

Kelly is a Middle School Principal who analyzes information about class sizes to decide how many teachers the school will need the next year.

✔ critical thinking skills

Explanation:

The charter of a corporation provides for the issuance of 115,873 shares of common stock. Assume that 37,721 shares were originally issued and 3,277 were subsequently reacquired. What is the amount of cash dividends to be paid if a $2 per share dividend is declared?

Answers

Answer:

$68,888

Explanation:

The Dividend are paid base on outstanding shares

Dividend paid = (37,721 - 3,277 shares) * $2

Dividend paid = 34,444 shares * $2

Dividend paid = $68,888

So, the amount of cash dividends to be paid is $68,888

Why do people donate to charitable organizations? Check all that apply.
•to do what is right
•to support a cause
•to develop their skills
•to earn college credit
•to spend time with friends

Answers

The act of helping others, donating to volunteering, or charity your time, will give you an improved feeling of well-being. The correct option is 'B' and 'C'.

What is Charitable Organizations?

The understanding that you've sacrificed time and/or money to help others create or need approving the change in the world is a stunning thing.

Your monetary donations can belong to causalities that promote more useful health, fund medical investigation, stock food stakes, or sponsorship organizations that fight poverty.

Investing in charities is like creating an investment towards a more useful destiny for your employees and your corporation

Therefore, The people donate to charitable organizations to help for a reason. The correct option is 'B' and 'C'.

Find more information about Organizations here:

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Answer:

A B C

Explanation:

A company's managers have decided to issue bonds to raise financial capital. What is the first step in this process?
A. Selling the bonds to investors
B. Contacting a financial advisory firm
C. Filing documents with the SEC
D. Determining the firm's creditworthiness
E. Preparing documentation

Answers

Answer: Contacting a financial advisory firm

Explanation:

Since the company's managers have decided to issue bonds to raise financial capital, the first step in this process is for them to contact a financial advisory firm.

The financial advisory firm would help in giving advice and also consultation regarding the finance of the company and provide them with strategies that can help the company reduce costs and achieve their financial goals.

All the following statements about residual value guarantees are correct about residual value guarantees, except that they:
a. protects lessors against technological changes.
b. protects lessors against marketplace changes.
c. protect lessees against lessors who abuse leased assets.
d. protect lessors against lessees who abuse leased assets

Answers

Answer:

c. protect lessees against lessors who abuse leased assets.

Explanation:

The residual value guarantee may be defined as a guarantee that is made to the lessor where the value of an underlying asset will become at least some specified amount at the end of the lease. The guarantee is given by the party unrelated to a lessor.

The residual value guarantee provides to protect the lessor against the lessees who tries to abuse the leased assets. It does not protect the lessees against the lessors.

A company reports basic earnings per share of $3.50, cash dividends per share of $1.25, and a market price per share of $64.75. The company's dividend yield equals:
a. 1.93%
b. 2.14%
c. 4.67%

Answers

Answer:

$1.93

Explanation:

The earnings per share is $3.50

Cash dividend per share is $1.25

Market price per share is $64.75

Therefore the company's dividend yield can be calculated as follows

= 1.25/64.75

= 0.0193 × 100

= $1.93

Hence the company's dividend yield is $1.93

If a bank has $120,000 of checkable deposits, a required reserve ratio of 20 percent, and it holds $40,000 in reserves, then the maximum deposit outflow it can sustain without altering its balance sheet is

Answers

Answer:Maximum deposit outflow sustainable without altering its balance sheet is   $20,000

Explanation:

Given

Check able deposits =$120,000

Required reserve ratio= 20 percent

Reserve=$40,000

Maximum deposit outflow sustainable = (Reserve - percentage of checKable deposits)/ 1- required reserve ratio

(40,000  - 0.2 x 120,000) / 1-0.2

(40,000-24,000) / 0.8

16,000/0.8

=$20,000

In September 2008, the stock market fell sharply and continued to perform poorly due to the financial crisis. How did this change impact GDP in the economy?

Answers

Answer:

Many people's wealth is held in stocks and as the price of stocks collapsed, they lost wealth.

Imagine that this happened to you. One day you are rich and that affects your spending habits. In a matter of few days or weeks, you lose a large portion of your wealth. So now, you are less rich or even poor. So your spending habits will be altered, i.e. you will spend less.

If you consider the economy as a whole, aggregate demand will fall, resulting in a decrease of aggregate supply, and an overall decrease of the GDP.

_____ is the rate that causes the present value of all cash flows from a property (including its resale value) to be equal to the original purchase price of the property.
a) IRR
b) NPV
c) TWR
d) TVM

Answers

Answer:

a) IRR

Explanation:

The internal rate of return is the rate of return at which the net present value is zero

The net present value means the difference between the present value of all cash inflows after discounted and the initial investment

Therefore when the above two things are equivalent to each other so this we called as internal rate of return (IRR)

hence, the correct option is a.

Peter crossed the street at a crosswalk without looking for oncoming traffic. He was struck first by a car driven by Abel and then by a car driven by Baker. Peter sued Abel and Baker for negligence. The jury determined that Peter was 60% at fault, Abel 30% and Baker 10%. The jury also determined that Peter suffered damages of $100,000. Abel is insolvent. In a contributory negligence jurisdiction, how much can Peter collect from Baker

Answers

Answer: Nothing

Explanation:

A contributory negligence state, simply states that in a situation whereby a plaintiff is negligent and thereby contributes to a particular accident, he or she will in this case be barred from recovering.

Since Peter crossed the street at a crosswalk without looking for oncoming traffic, Peter would collect nothing from Baker.

________________________ is revolutionizing how businesses operate factories or maintain equipment. Imagine an engine on an aircraft detecting an issue via sensors, self-diagnosing the issue, and sending a signal to both pilots and a command center to request a fix or even performing the fix on itself. Group of answer choices Internet of Things Business Process Modeling Tools Order Management Systems Enterprise Resource Planning Systems

Answers

Answer: Internet of Things.

Explanation:

Internet of Things relates to how physical objects are now being equipped with software, sensors and every other forms of technologies so that it will aid the sharing and communication of data with other devices over the internet.

Therefore, internet of things is revolutionizing how businesses operate factories or maintain equipment.

Blaylock plans to sell 85,000 units of product no. 794 in May, and each of these units requires three units of raw material. Pertinent data follow. Product No. 794 Raw Material Actual May 1 inventory 11,000 units 29,000 units Desired May 31 inventory 17,000 units 20,000 units On the basis of the information presented, how many units of raw material should Blaylock purchase for use in May production

Answers

Answer:

Purchases=  264,000 units

Explanation:

Giving the following information:

Product N°794:

Sales= 85,000 units

Beginning inventory= 11,000

Ending inventory= 17,000

Raw materials:

Standard raw material per unit= 3 units

Beginning inventory= 29,000 units

Ending inventory= 20,000 units

First, we need to calculate the total production for May:

Production= sales + desired ending inventory - beginning inventory

Production= 85,000 + 17,000 - 11,000

Production= 91,000 units

Now, purchases of raw material for May:

Purchases= production + desired ending inventory - beginning inventory

Purchases=  91,000*3 + 20,000 - 29,000

Purchases=  264,000 units

Which employee role is directly accountable to ensure that employees are implementing security policies consistently

Answers

Answer: Information Technology

Explanation:

The employee role is directly accountable to ensure that employees are implementing security policies consistently is the information technology staff.

Such individual implements and also maintains security policies, procedures, and standards. The Information Technology staff gives the necessary mechanisms that will be required to enhance the security program.

The following data are available relating to the performance of Long Horn Stock Fund and the market portfolio:
Long Horn Market Portfolio
Average return 19 % 12 %
Standard deviations of returns 35 % 15 %
Beta 1.5 1.0
Residual standard deviation 3.0 % 0.0 %
The risk-free return during the sample period was 6%.
What is the Treynor measure of performance evaluation for Long Horn Stock Fund?
a. 0.0133
b. 0.04
c. 0.0867
d. 0.3143
e. 0.3714

Answers

Answer: c. 0.0867

Explanation:

Treynor measure for Long Horn Stock Fund;

= (Average return - Risk-free return) / Beta

= (19% - 6%) / 1.5

= 0.08666667

= 0.0867

The three main methods that can be used to achieve the efficient use of a common resource are:___________.
A. property rights, production quotas, and ITQs
B. taxes, production quotas, and ITQs
C. property rights, marketable permits, and vouchers
D. property rights, production quotas, and marketable permits

Answers

Answer:

Option A:property rights, production quotas, and ITQs

Explanation:

A Common Resources is known simply as a resource for which rights are held in common by a group of individuals who has no exclusive ownership right. With common resources, property rights are not well-defined and are non-exclusive. In a common resource, an individual has the right to use the resource, but not to change its form or transfer it to other individuals. The policies that helps to improve efficiency include: production quotas, individual transferable quotas and property right.

Production quotas is simply an upper limit to the quantity of a good that may be produced legally.

An individual transferable quota is a production limit that is given to an individual who is free to transfer the quota to another person.

By the assignment of property rights, common property becomes private property.

Discuss how construction of a portfolio can lower the risk of an investor.

Answers

Answer:

Simply put, the other meaning portfolio construction is diversification of risk. Portfolio construction is the one of simplest way of reducing risk without significantly affecting the returns.  

Ways of diversifying risk includes Pension Funds, Mutual Fund, Equity, Stocks, Debt / Bonds, Retirement Saving, etc.  If someone had made their investment in only one asset class, then there will be less returns available with high risk. while doing portfolio investment, it will give a systematic and controlled risky investment with higher return opportunities because some assets will perform well while other do poorly. but next year scenario could be changed or reversed. There are some thumb rules while doing portfolio investment, but it can be changed based on individual's personal goal.

When a business owner uses an independent contractor to perform nonhazardous work, the business owner ordinarily is:_____.
a. not liable for harm to third persons or their property.
b. not bound to contracts made by the independent contractor.
c. not liable for the negligence of employees of the independent contractor.
d. not liable for the negligence of the independent contractor.
e. all of these.

Answers

Answer:

e. all of these.

Explanation:

In the case when the business owner hired an independent contractor so he would not be responsible for the actions and the results of the independent contractor negligence or his contracts

Therefore as per the given options, the option d is to be chosen as it is not bound and not liable at all

hence, the correct option is e.

A coupon bond that pays interest of $60 annually has a par value of $1,000, matures in 5 years, and is selling today at a $75.25 premium from par value. The current yield on this bond is _________.

a. 6%
b. 6.49%
c. 6.73%
d. 7%

Answers

Answer:

b. 6.49%

Explanation:

Calculation for The current yield on this bond

First step is to calculate the Current price

Current price = $1,000 - 75.25

Current price = $924.75

Now let calculate the Current yield using this formula

Current yield =Coupon bond interest/Current price

Let plug in the formula

Current yield = $60/$924.75

Current yield = 6.49%

Therefore the current yield on this bond is 6.49%

Assume a company has two divisions, A and B. The company’s overall sales, overall contribution margin ratio, common fixed expenses, and net operating income are $500,000, 48%, $50,000, and $10,000, respectively. Division A has a contribution margin of $180,000. If Division B has traceable fixed expenses of $80,000, then what is Division A’s segment margin? Multiple Choice $80,000 $40,000 $20,000 $60,000

Answers

Answer:

$60,000

Explanation:

total sales A + B = $500,000

variable expenses = $260,000

combined contribution margin = $240,000

contribution margin A = $180,000

contribution margin B = $60,000

combined segment margins = $60,000 (= -$20,000 + $80,000)

segment margin B = -$20,000

segment margin A = $80,000

common fixed expenses = $50,000

net income = $10,000

The margin available after a segment has covered all of its costs is known as segment margin. The segment profit margin is $60,000 per segment. As a result, option (d) or (iv) is the proper response.

How do you compute segment margin?

[tex]\text{total sales A + B} = $500,000\\\text{Variable expenses} = $260,000\\\text{Combined contribution margin} = $240,000\\\text{Contribution margin A} = $180,000\\\text{contribution margin B} = $60,000\\\text{combined segment margins} = $60,000 (= -$20,000 + $80,000)\\\text{segment margin B} = -$20,000\\\text{segment margin A} = $80,000\\\text{common fixed expenses} = $50,000\\\text{net income}= $10,000[/tex]

For more information about margin segments, refer below

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On March 31, 2021, Top Notch Goods committed to a plan to sell machinery equipment. The machinery equipment was available for immediate sale, and an active plan to locate a buyer was initiated. The machinery equipment had been purchased on January 1, 2019, for $260,000. The machinery equipment had an estimated six-year service life and residual value of $20,000. The machinery equipment was being depreciated using the straight-line method. Top Notch Good's fiscal year ends on December 31.Calculate the equipment’s book value as of March 31, 2021By December 31, 2021, the machinery equipment has not been sold, but management expects that it will be sold in 2022 for $150,000. For what amount is the machinery equipment reported in the December 31, 2021, balance sheet?

Answers

Answer:

$150,000

Explanation:

This machine is to be classified as an asset held for sale. The assets held for sake are carried on the Statement of Financial Statement at the amount lower of Fair Market Value and the Carrying Amount.

Organizational politics may be reduced by Multiple Choice being more tolerant of employees who use political tactics to get what they want from the organization. conducting background checks on potential employees. cutting back resources available to organizational units. encouraging leaders to become role models of organizational citizenship. selecting employees with a high need for personalized power.

Answers

Answer:

encouraging leaders to become role models of organizational citizenship

Explanation:

Organizational politics is simply a deliberate or an intentional acts of influence to promote,protect or enhance the self-interests of individuals or groups of people.

It can be reduced by encouraging leaders to become role models of organizational citizenship instead of symbols of successful organizational politicians.

It usually had its emphasis based on self-interest that separates this form of social influence.

Coronado Industries reported total manufacturing costs of $450000, manufacturing overhead totaling $68000, and direct materials totaling $86000. How much is direct labor cost

Answers

Answer:

$296,000

Explanation:

Calculation for How much is direct labor cost

Using this formula

Direct labor cost=Total manufacturing costs-Manufacturing overhead totaling-Direct materials totaling

Let plug in the formula

Direct labor cost=$450,000 - $68,000 - $86,000

Direct labor cost=$296,000

Therefore the direct labor cost will be $296,000

Does anyone know how to slap babies correctly?

Answers

Answer:

no don't do that.

Explanation:

Answer:

Yes. You get in the car, buckle up, ad drive to the police station and turn yourself in for child abuse :)

Explanation:

You own a shoe store with a merchandise book value of $178,000. You conduct a physical inventory and find the value to be $169,000. Your total sales between inventories totaled $476,000. Calculate the shrinkage as a percentage of sales.

Answers

Answer:

1.89%

Explanation:

The book value of the merchandise is  $178,000

Physical inventory reveals stock is worth $169,000

The shrinkage = $178,000 - $169,000

=$9000

As a percentage of sales, the shrinkage will be

=$9000/$476,000 x 100

=0.0189076 x 100

=1.89%

Answer:

1.9%

Explanation:

A stock is currently selling for $79 per share. A call option with an exercise price of $83 sells for $3.95 and expires in three months. If the risk-free rate of interest is 2.8 percent per year, compounded continuously, what is the price of a put option with the same exercise price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Answers

Answer: $7.37

Explanation:

The price of a put option with the same exercise price would be calculated as:

C + Xe^-rt = P + S

It should be noted that in the formula above,

P = Put option price

C = price of call option

S = stock price

X = exercise price

r = interest rate

t = time

We then slot in the values which will be:

= 3.95 + 83e^-2.8% × 3/12 = P + 79

P = 3.95 + 83e^-2.8% × 3/12 - 79

P = 3.95 + 82.42 -79

= $7.37

Making decisions about how Threadless should allocate its resources to both current and future product innovations is a process known as:_______
a. long-term financing.
b. financial planning.
c. financial management.
d. short-term financing.
e. budgeting.

Answers

Answer:

c. financial management.

Explanation:

financial management can be regarded as carrying out activities such as organizing, controlling as well as planning of financial resources in order to achieve the goals of the organization. It involves the well utilization of funds in a particular Enterprise. It should be noted that Making decisions about how Threadless should allocate its resources to both current and future product innovations is a process known as financial management.

Making decisions about how Threadless should allocate its resources to both current and future product innovations is a process known as Financial management.

Financial management can be defined as the strategic planning, organising, directing, and controlling of financial resources in an organisation.

Financial management can be applied in making the following decisions in an organization:

Investment decision

Dividend decision

Financing decision

It also involves applying the principles of management to the financial assets or allocation of resources in an organization.

Therefore, Financial management is the decision used to allocate resources to both current and future product innovations in a company.

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