You own one share of stock in BA's Best, Inc., as well as a put option on the same company with an exercise price of $40 and an expiration date one year from now. Which of the following functions describes the combined present value of the stock and the option, as a function of share price p at the expiration date? In other words, what is the current value of both assets, as a function of the future value of the stock at expiration? Assume an effective annual discount rate of 8%. a. p> 40 p < 40 P 1.08
b. 40 p < 40 1p p > 40 40 p > 40
c. p < 40
d. 40 – P 37
e. p < 40 p> 40 P 1.08

An office manager is concerned with declining productivity. despite the fact that she regularly monitors her clerical staff four times each day—at 9: 00 am, 11: 00 am, 1: 00 pm, and again at 3: 00 pm—office productivity has declined 30 percent since she assumed the helm one year ago. would you recommend that the office manager invest more time monitoring the productivity of her clerical staff? explain.

%of the world's population controls approximately % of the world's finances (the sum of gross domestic products)" quizlket

Your company is starting a new r& d initiative: a development of a new drug that dramatically reduces the addiction to smoking. the expert team estimates the probability of developing the drug succesfully at 60% and a chance of losing the investment of 40%. if the project is successful, your company would earn profits (after deducting the investment) of 9,000 (thousand usd). if the development is unsuccessful, the whole investment will be lost -1,000 (thousand usd). your company's risk preference is given by the expected utility function: u(x) v1000 +x, where x is the monetary outcome of a project. calculate the expected profit of the project . calculate the expected utility of the project . find the certainty equivalent of this r& d initiative . find the risk premium of this r& d initiative e is the company risk-averse, risk-loving or risk-neutral? why do you think so?