Stock option price-Strike price-Put and Call
What do you mean by the following terms: a stock option price, strike price and what are a put and a call?What is the merits or demerits of purchasing stock options over stocks? What function do Mutual Funds execute with Stock Market investments?
Expert
A stock option offers an employee the right to buy a certain number of his/her company shares at some future date and at the specific price already decided by the employer. This specified price is referred to as the stock option price and may be mostly the current price while issuing the stock option. Similarly, an option offers an investor the right to buy or sell but not an obligation and the specified price at which the investor can buy or sell shares is referred to as the strike price. A call option offers the right to buy and a put option offers the right to sell shares at the strike price within a specified time period.
The advantages of options over stocks include (1) leverage over a stock without any obligation, (2) cheaper per share, (3) limited risk and (4) protection against stock volatility.
The disadvantages include (1) higher cost of trading, (2) complex to understand and needs a keen eye, (3) subject to time-sensitivity and (4) some positions have unlimited risk. Of the many methods to trade in a stock market, mutual funds play an important role, since they include a portfolio of stocks managed by an expert fund manager and hence investors need not invest more time and efforts in choosing the specific stocks as when done individually. Thus mutual funds lower the risks, investment amount and the time that an investor spends but offers good profits.
Explain evaluation of net present value (NPV) and internal rate of return (IRR) in brief?
When doubling your viewing of soap operas to 16 hrs per week reasons your IQ score to drop/fall from a mastermind level of 140 to a sluggish 70, your TV elasticity of brain power will be: (i) + 1.0. (ii) zero. (iii) – 1.0. (d) +0.5. (e) -0.5.
Can someone explain/help me with best solution about problem of microeconomics in economic... Main concerns of microeconomics would consist of: (w) rates of inflation. (x) consumer options. (y) rates of unemploymen
What is the difference among the discount rate, prime rate and the subprime rates of interest? Which interest rate in particular build the 2008 recession? Explain how that happened.
The illustration of arbitrage takes place when: (1) Enterprising students purchase used textbooks much cheaply on E-Bay and sell them to another students at lower prices than bookstore charges. (2) Ivan purchases a stock when it is cheap and sells it
How will you treat the given in estimating rational income of India? Provide reasons for your answer. (i) The value of bonus shares received by the shareholders of a company.(ii) Interest received on loan pro
Whenever longer periods are considered and hence bigger ranges of adjustments (that is, substitutions) become probable, demand curves tend to become: (i) Flatter, and therefore do supply curves. (ii) Flatter, as supply curves become steeper. (iii) Ste
Question: How will a fall in domestic investment affect the trade surplus and net capital outflows in the domestic economy, the trade deficit and capital inflows in the rest of the world, investment in both economi
No need apa format no need introduction and conclusion Only answer question being ask, thanks
Devaluation means decrease in the external value of a country’s currency as an aware policy measure adopted by the Government of a country. In another words, we make our currency less costly in terms of foreign currency. This builds our goods ch
18,76,764
1930403 Asked
3,689
Active Tutors
1452655
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!