The option calculator uses a mathematical formula called the Black-Scholes options pricing formula, also popularly called the ‘Black-Scholes Option Pricing Model’. This is probably the most revered valuation model in Economics, so much so that its publishers (Robert C. Metron and Myron Scholes) ...
If your calculated intrinsic value differed substantially from the current market price, and if your views are consistent with those of most investors (the marginal investor), what would happen in the What is a firm's intrinsic value? Its current s...
At the end of 12 months, the investor has invested a total of Rs. 51,900 in the stock of TCS through the SIP. The average price paid by the investor for each share of TCS is Rs. 1,790, which is calculated by dividing the total amount invested by the total number of shares purchas...
Explain why an option's time value is greatest, when the stock price is near the exercise price, and why it nearly disappears, when the option is deep-in- or out-of-the-money? Critique the following s What are the intrinsic values and time premium paid ...
For example, Suppose you expect that your portfolio has an annualized return of 12%. If risk-free rate is 7% and your portfolio carries a 8% standard deviation. The Sharpe ratio for your portfolio would be calculated as: Sharpe Ratio = (12% - 7%)/ 8% = 0.625 This ratio helps you to...
In following a value investment approach, before picking stocks for investment you would carry out detailed research and analysis about the company to...Become a member and unlock all Study Answers Start today. Try it now Create an account Ask a question Our experts can answer your tough...
How is a gain or loss calculated from the trading of call options? How do shareholders earn returns on stocks? You purchase 100 shares for $50 a share ($5,000), and after a year the price rises to $60. What will be the percentage return on your investment ...
How is it used to identify a peak in stock prices? Portfolio Performance The portfolio performance is evaluated against a benchmark or against the set objective. The evaluation indicates whether the portfolio has outperformed or under-performed the benchmark and ...
If you are investing in the stock market, which would you invest in and why? Financial Instruments: Financial instruments refer to tradable assets that offer efficient capital transfer and flow among the market participants in an ec...
Bond is a form of debt which is issued by a government or a company in order to raise capital from the investors promising to repay the amount with a specific rate of interest on a future date. It is a fixed income bearing security....