answersLogoWhite

0


Want this question answered?

Be notified when an answer is posted

Add your answer:

Earn +20 pts
Q: Does the value of risky debt equals the value of risk free debt minus a put option?
Write your answer...
Submit
Still have questions?
magnify glass
imp
Continue Learning about Finance

How do you determine whether the currency option is in the money?

"In the Money" is a term used in option trading as a determinate to if an option has "Intrinsic Value." In the Money, does NOT mean in profit. There are two components to an option value, TIME VALUE, and INTRINSIC VALUE. Time Value + Intrinsic Value = Option Premium. When the market price is above the option strike price of a CALL option, that option is considered "In the Money" i.e. having intrinsic value. When the market price is below the option strike price of a PUT option, that option is considered "In the Money" i.e. having intrinsic value.


Which term is defined as the value of the home minus the loan?

The total value of the house minus the outstanding amount of the loan is referred to as "home equity".


What causes an increase in the value of an option?

An increase in the market price of the item the option is for.


A call option on Bedrock Boulders stock has a market price of 7 The stock sells for 30 a share and the option has an exercise price of 25 a share What is the exercise value of the call option?

There's intrinsic value and extrinsic value in options. Intrinsic value is the either the stock price minus the exercise price, or the other way around depending on which way the stock is going to travel. In the case of this call, if I exercised at $25 and sold at $30, the intrinsic value is $5 per share. To calculate extrinsic value, subtract the premium from the intrinsic value. On this deal, you paid seven dollars to make five so the exercise value, or extrinsic value, of this option is negative two dollars. The idea of buying calls is to MAKE money so most people would look at this one close: is the stock going to clear $32 before the option expires? Thirty-two dollars is the break-even point so if you couldn't be sure of being able to sell the stock for more than that you'd be best off to pass on the deal.


What is surrender value and cash value?

They are one in the same but the surrender value is the cash value minus surrender charges. Over time the surrender charges go away.

Related questions

The carrying value of a depreciable asset equals?

The carrying value (or book, or, net value) of a long term asset equals cost minus accumulated depreciation.


What is the value of -3 if x equals 3x minus 1?

The value of -3 is -3. The value of x has no bearing on that!


What is the value of x in 4x minus 2 equals 78?

x=19


What is the value of the expression -5x 12 when x equals 5?

That will depend on the plus or minus value of 12 which has not been given.


What is the value of x when 2x plus 3 equals 3x minus 4?

X=7


What is the value of x plus 4 equals 9?

5. Just do 9 minus 4. 5 plus 4 equals 9


If 6y minus 8 equals 28 what is the value of y?

If 6y-8 = 28 then y = 6


If N equals 16 minus 4 times 3 plus 22 then the value of N is?

8


What is x in the equation x squared minus forty-nine equals 0?

The value of x is 7


What is the value of X for 5 minus 3x equals x plus 1?

If: 5-3x = x+1 then the value of x = 1


How do you persist data in PHP forms specially drop down box?

When getting any Information in PHP from a form use $_POST (unless your method is GET in which case $_GET)This is how you do it (I'm using ( and ) instead of < and >)(?php$my_drop_down = $_POST['drop_down_name']; #Then $my_drop_down equals what ever's in value= eg My Value 1, My Value 2,My Value 3?)(select name="drop_down_name")(option value="My Value 1" selected)My Option 1(/option)(option value="My Value 2")My Option 2(/option)(option value="My Value 3")My Option 3(/option)(/select)(I've also added a few php help links)


What is the value of x if 2x minus 3 equals 15?

9 Please tell me you're in 4th grade.