Aeuropean call option and put option on a stock both have a strike price of $20 and an expiration date in three months. both sell for $3. the risk-free interest rate is 10% per annum, the current stock price is $19, and a $1 dividend is expected in one month. is there an arbitrage opportunity? if there is an arbitrage opportunity, clearly state what condition must be satisfied to eliminate the arbitrage opportunity. what is the strategy followed to make a profit from the arbitrage opportunity? what is the profit expressed as a present value?

Wilson company paid $5,000 for a 4-month insurance premium in advance on november 1, with coverage beginning on that date. the balance in the prepaid insurance account before adjustment at the end of the year is $5,000, and no adjustments had been made previously. the adjusting entry required on december 31 is: (a) debit cash. $5,000: credit prepaid insurance. $5,000. (b) debit prepaid insurance. $2,500: credit insurance expense. $2500. (c) debit prepaid insurance. $1250: credit insurance expense. $1250. (d) debit insurance expense. $1250: credit prepaid insurance. $1250. (e) debit insurance expense. $2500: credit prepaid insurance. $2500.

The market demand curve for a popular teen magazine is given by q = 80 - 10p where p is the magazine price in dollars per issue and q is the weekly magazine circulation in units of 10,000. if the circulation is 400,000 per week at the current price, what is the consumer surplus for a teen reader with maximum willingness to pay of $3 per issue?

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