Contemporary Engineering Economics (6th Edition)
6th Edition
ISBN: 9780134105598
Author: Chan S. Park
Publisher: PEARSON
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Question
Chapter 12, Problem 19P
(a):
To determine
Calculate the expected return.
(b):
To determine
Calculate the Maximum payment.
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b) Jay is holding some Tesla shares (NASDAQ: TSLA) and The TSLA stocks are currently
trading at $985 on the Nasdaq. Given TSLA stocks are very volatile, Jaleel wishes to
protect the value of his investments. He seeks your advice on using option contracts
and presents a list of options for you to choose from. Assume the number of underlying
shares per contract is 100 shares.
Strike
$975
$980
$985
$1005
(i)
(ii)
Call premium Moneyness
$10.01
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$0.63
$0.05
Put premium Moneyness
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$0.04
$0.99
$20.48
Please specify the moneyness of the above options. Are they in the money, at
the money, or out of the money?
Explain the type of risk that Jay is facing and which option is your suggestion
to control his risk, provide your reason and explain it.
Daily demand for a certain product is 60 and. The source of supply is reliable and
maintains a constant lead time of six days. The cost of placing the order is $10 and
annual holding costs are $0.50 per unit. There are no stock-out costs, and unfilled
orders are filled as soon as the order arrives. Assume sales occur over the entire
365 days of the year. Find the order quantity and reorder point.
ABC Analysis
Percent of Annual S
Volume
Stock Number
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Volume
J24
12,500
46.2
R26
9,000
333
L02
3.200
11.8
M12
1,550
5.8
P33
620
2.3
T72
65
0.2
S67
53
0.2
Q47
32
0.1
V20
30
0.1
M=100.0
What are the appropriate ABC groups of inventory iten
A sales position is offered at a pharmaceutical company with two salary options. Option A would pay an annual base salary of $15,000 plus a commission of 7% on sales. Option B would pay an
annual base salary of $30,000 plus a commission of 6% on sales. The equation y 15,000+0.07x models salary Option A and the equation y 30,000+0.06x models salary Option B, where x
represents the amount of annual sales and y represents the annual salary in both equations. Determine the annual sales required for the options to result in the same annual salary.
The annual sales required would be $ (Type an integer or a decimal)
Chapter 12 Solutions
Contemporary Engineering Economics (6th Edition)
Ch. 12 - Prob. 1PCh. 12 - Prob. 2PCh. 12 - Prob. 3PCh. 12 - Prob. 4PCh. 12 - Prob. 5PCh. 12 - Prob. 7PCh. 12 - Prob. 8PCh. 12 - Prob. 9PCh. 12 - Prob. 10PCh. 12 - Prob. 11P
Ch. 12 - Prob. 12PCh. 12 - Prob. 13PCh. 12 - Prob. 14PCh. 12 - Prob. 15PCh. 12 - Prob. 16PCh. 12 - Prob. 17PCh. 12 - Prob. 18PCh. 12 - Prob. 19PCh. 12 - Prob. 20PCh. 12 - Prob. 21PCh. 12 - Prob. 22PCh. 12 - Prob. 23PCh. 12 - Prob. 24PCh. 12 - Prob. 25PCh. 12 - Prob. 26PCh. 12 - Prob. 27PCh. 12 - Prob. 28P
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