Stock option price-Strike price-Put and Call
What do you mean by the following terms: a stock option price, strike price and what are a put and a call?What is the merits or demerits of purchasing stock options over stocks? What function do Mutual Funds execute with Stock Market investments?
Expert
A stock option offers an employee the right to buy a certain number of his/her company shares at some future date and at the specific price already decided by the employer. This specified price is referred to as the stock option price and may be mostly the current price while issuing the stock option. Similarly, an option offers an investor the right to buy or sell but not an obligation and the specified price at which the investor can buy or sell shares is referred to as the strike price. A call option offers the right to buy and a put option offers the right to sell shares at the strike price within a specified time period.
The advantages of options over stocks include (1) leverage over a stock without any obligation, (2) cheaper per share, (3) limited risk and (4) protection against stock volatility.
The disadvantages include (1) higher cost of trading, (2) complex to understand and needs a keen eye, (3) subject to time-sensitivity and (4) some positions have unlimited risk. Of the many methods to trade in a stock market, mutual funds play an important role, since they include a portfolio of stocks managed by an expert fund manager and hence investors need not invest more time and efforts in choosing the specific stocks as when done individually. Thus mutual funds lower the risks, investment amount and the time that an investor spends but offers good profits.
Macroeconomics is a study of: (1) the economy as an entire or in the aggregate. (2) worldwide economic problems of individual households. (3) interactions among firms and households in one exact market or industry. (4) the rising income inequality wit
Suppose the value of exports of goods of a country is Rs. 1,000 crores and the value of imports of goods is Rs. 1,200 crores, what will be the trade balance (or balance of trade)?
Macro Economics: Macro economics studies the economy as an entire.
discuss with the help of IS-LM model why money has no effect on output in classical supply case
What is the relationship among interest rate and bond prices? Is there any difference among T-Bills versus Corporate bonds in reaching your assessment? Whenever the stock market falls, where do you assume that most investor place their money and why?<
The consumer reaches equilibrium for any two goods X and Y whenever the: (1) MUx/Px = MUy/Py. (2) MUx/MUy = Py/Px. (3) Utility from X equivalents the utility produced by Y. (4) Point of diminishing returns is arrived at. Can someon
Define fiscal policy? Answer: Fiscal policy is the revenue and expenditure policy of government with a view to combat the state of inflationary or deflationary gap
What stage of the business cycle is our economy experiencing at present time? proof your answer.
DISCUSS the experience of high GNP countries and low GNP with regard to PQLI.
What possible fiscal policy actions can be taken with respect to expenses and income to accurate excess demand and deficient demand in economy? Answer:
18,76,764
1945137 Asked
3,689
Active Tutors
1458021
Questions Answered
Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!