Myles houck holds 800 800 shares of lubbock gas and light. he bought the stock several years ago at $ 48.22 $48.22, and the shares are now trading at $ 75.00 $75.00. myles is concerned that the market is beginning to soften. he doesn't want to sell the stock, but he would like to be able to protect the profit he's made. he decides to hedge his position by buying 8 8 puts on lubbock g& l. the 3-month puts carry a strike price of $ 75.00 $75.00 and are currently trading at $ 2.52 $2.52. a. how much profit or loss will myles make on this deal if the price of lubbock g& l does indeed drop, to $ 61.50 $61.50 a share, by the expiration date on the puts? b. how would he do if the stock kept going up in price and reached $ 90.50 $90.50 a share by the expiration date? c. what do you see as the major advantages of using puts as hedge vehicles? d. would myles have been better off using in-the-money puts long dash "that is, puts with an $ 86.00 $86.00 strike price that are trading at $ 10.66 $10.66? how about using out-of-the-money puts long dash "say, those with a $ 70.00 $70.00 strike price, trading at $ 1.00 $1.00? explain.
Answers: 3
Business, 22.06.2019 10:20, christianconklin22
The following information is for alex corp: product x: revenue $12.00 variable cost $4.50 product y: revenue $44.50 variable cost $9.50 total fixed costs $75,000 what is the breakeven point assuming the sales mix consists of two units of product x and one unit of product y?
Answers: 3
Business, 22.06.2019 15:40, brashley
Acompany manufactures x units of product a and y units of product b, on two machines, i and ii. it has been determined that the company will realize a profit of $3 on each unit of product a and $4 on each unit of product b. to manufacture a unit of product a requires 7 min on machine i and 5 min on machine ii. to manufacture a unit of product b requires 8 min on mchine i and 5 min on machine ii. there are 175 min available on machine i and 125 min available on machine ii in each work shift. how many units of a product should be produced in each shift to maximize the company's profit p?
Answers: 2
Myles houck holds 800 800 shares of lubbock gas and light. he bought the stock several years ago at...