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Is the seller of the option retains the option premium whether or not the option is expired?
Yes, as soon as the option is sold on the open market to a buyer, the seller immediately receives and retains the option's premium. This premium is kept regardless of the action of the market or the buyer. In the event the option expires worthless, the premium becomes profit for the seller, or in contrast, the premium can be used to help offset loss if the seller decides to close the position and buy back the option. It is important to note, however, that the premium received remains in escrow and cannot be used in any capacity until the risk taken on by the trade is eliminated in due course by either the expiration of the option, or the buy back of the position.
When bonds are issued at a premium what is the affect on interest?
Bonds issued at a premium offer an interest rate that is above the market interest rate. Typically, a bond issuer offers a premium interest rate to offset higher risk associated with a bond offering that has a low credit rating. A purchaser of a bond offered at a premium will receive a higher interest rate but will incur a higher degree of credit risk.
Does Capitol One offer a premium finance option?
No. This premium finance option is usually handled by another company. Capitol One does not lend funds for insurances such as life, etc. This is not the purpose of Capitol One. It is not a premium finance company.
When must a long call option be sold to collect the premium?
Whenever you want. You collect the premium at the time you sell the call.
Can you pay a one time fee for a life insurance policy?
Generally, most insurers do offer an option by which you can pay the entire premium at once. This is usually called, appropriately, "single pay". This is not applicable on all life policies.However, in most Ulip policies, Single Premium or one-time premium option is there. Specially in conventional policy, where single premium option is there, you gain by way of paying lesser amount in comparison to consolidated regular premium amount.
What is the journal entry to record interest expense and bond premium?
debit interest expensedebit bond premiumcredit cash
IF Covered Interest rate Parity says that interest rate differential equal?
forward/discount rate premium
What happens when issuing bonds payable when the market interest rate is less than the stated interest rate?
premium
Mortality minus interest plus expenses equals?
Net Premium
What are some benefits of buying premium bonds?
Premium bonds offer higher interest rates than bonds sold at par. However, there is a premium cost that one must pay. Don't let that deter you, as the extra interest should more than pay the premium when the bond reaches maturity. The other benefit of Premium bonds is that they are less volatile than par bonds.
What is the premium that reflects the risk associated with changes in interest rates for l long-term security?
Maturity Risk Premium (MPR)
When effective interest method is used to amortize bond premium or discount the periodic amortization will be?
increasse if the bonds were issued at either a discount or premium.
