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FINA-339 Lecture Notes - Lecture 5: Rugby League Positions, Barcode, Software

78 views9 pages
ambermink21
21 Dec 2015
School
Centennial College
Department
FINA
Course
FINA-339
Professor
C H A M A N D O M A

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Document Summary

For your convenience, the chapter 5 appendix of common cca rates, is available at the end of this . pdf file. Federal tax credits for individuals - personal credits (ita 118) The amounts below include the ,093 fca when. Spousal 15% of ,327 (,699), less 15% of the spouse"s net income for tax purposes. Base amount increased by ,093 (to ,420) if the spouse qualifies for the fca. Not avail- able when the spouse"s income is more than ,327 (or ,420). Eligible dependant this credit is the same as the one that is available for a spouse. Base amount also increased by ,093 (to ,420) if the eligible dependant qualifies for the fca. 118(1)(c. 1) caregiver 15% of ,608 (), less 15% of the dependant"s net income in excess of. Base amount increased by ,093 (to ,701) if the related adult qualifies for the. Infirm dependants over 17 15% of ,700 (,005), less 15% of the dependant"s net.

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Related Questions

Aerotech, an aerospace technology research firm, announced this morning that its hired the world's most knowledgeable and prolific space researchers. Before today, Aerotech's stock had been selling for $100. Assumed that no other information is received over the next week and the stock market as a whole does not move.

a) What do you expect will happen to Aerotech's stock?

b) Consider the following scenarios:

i) The stock price jumps to $118 on the day of the announcement. In the subsequent days, it floats up to $116

ii) The stock price jumps to $116 and remains at that level.

iii) The stock price gradually climbs to $116 over the next week.

c) Which of these scenarios indicates market efficiency? which don not? why?

Recently, Alibaba stock (symbol BABA) closed at $115.10 a share, up $.26 on the day. Consider the following chart giving the premium as of close of trading on that day on various options on Alibaba shares:

Calls Last Sale Net Bid Ask Vol Open Int Puts Last Sale Net Bid Ask Vol Open Int
BABA1405L110-E 7.03 -0.52 6.70 7.30 26 909 14 Dec 110.00 BABA1405X110-E 2.12 +0.26 1.95 2.20 5 295
BABA1405L111-E 6.40 -0.25 6.10 6.70 36 42 14 Dec 111.00 BABA1405X111-E 2.64 0.0 2.30 2.60 0 54
BABA1405L112-E 5.86 -0.19 5.50 6.10 14 298 14 Dec 112.00 BABA1405X112-E 2.78 0.0 2.70 3.00 0 122
BABA1405L113-E 5.19 -0.45 4.90 5.40 35 63 15 Dec 113.00 BABA1405X113-E 3.83 +0.33 3.10 3.70 1 39
BABA1405L114-E 4.75 -0.25 4.50 5.00 27 256 15 Dec 114.00 BABA1405X114-E 3.88 +0.07 3.60 4.10 20 169
BABA1405L115-E 4.22 -0.48 4.10 4.40 20 1869 15 Dec 115.00 BABA1405X115-E 4.46 +0.16 4.10 4.70 53 352
BABA1405L116-E 3.82 -0.91 3.70 4.00 11 326 16 Dec 116.00 BABA1405X116-E 5.24 +0.79 4.60 5.40 10 27
BABA1405L117-E 3.49 -0.74 3.30 3.60 13 228 16 Dec 117.00 BABA1405X117-E 5.76 +1.26 5.20 6.00 11 95
BABA1405L118-E 3.05 -1.53 2.95 3.20 1 196 16 Dec 118.00 BABA1405X118-E 5.20 0.0 5.90 6.70 0 54
BABA1405L119-E 3.20 0.0 2.45 2.90 0 361 17 Dec 119.00 BABA1405X119-E 5.12 0.0 6.50 7.40 0 160
BABA1405L120-E 2.42 -0.32 2.30 2.60 776 2543 17 Dec 120.00 BABA1405X120-E 5.80 0.0 7.20 8.00 0 106



a. What is the premium on the December, 115 call, i.e. the call option which expires on the third Friday of December, and has a strike price of $115?

b. How much would an investor who wanted to buy 1 contract of this option have had to spend (before considering any commission or fees)?

c. What is the formula for the intrinsic value of a call? What was the intrinsic value of the Dec. 118 call? Was this option “in the money” or “out of the money”? What was the time value of this option?

d. Was the Dec. 114 call in or out of the money? What was the intrinsic value of this option? What was the time value of this option?

e. What was the premium on the Dec. BABA 118 put? Was this option in or out of the money? What was the intrinsic value of this put? What is the time value?

f. What was the intrinsic value of the Dec. BABA 112 put? Was this option in or out of the money? What was the option’s time value?

g. Based on the $115.10 price of Alibaba’s shares, what is the leverage on the Dec. 119 call? Round your answer to two decimal places.

h. Draw a hockey stick diagram for a short position in the BABA Dec. 119 call.

I. Draw a hockey stick diagram for a long position in the BABA Dec. 118 put.

To finance some manufacturing tools it needs for the next 3 years, Waldrop Corporation is considering a leasing arrangement. The tools will be obsolete and worthless after 3 years. The firm will depreciate the cost of the tools on a straight-line basis over their 3-year life. It can borrow $4,900,000, the purchase price, at 8% and buy the tools, or it can make 3 equal end-of-year lease payments of $2,050,000 each and lease them. The loan obtained from the bank is a 3-year simple interest loan, with interest paid at the end of the year. The firm's tax rate is 30%. Annual maintenance costs associated with ownership are estimated at $220,000, but this cost would be borne by the lessor if it leases. What is the net advantage to leasing (NAL), in thousands? (Suggestion: Delete 3 zeros from dollars and work in thousands.)

A.$96

B.$106

C.$130

D.$118