
Toy: Teddy bear
Current Price: $67.99
Need: 500 bears
Solution:
Toy: Teddy bear
Current Price: $67.99
Need: 500 bears
Part B )
Current date = March 2020
Future Delivery date = Dec 2020
Spot Price = $67.99
Quantity = 500
Future price = Spot price * exp (interest rate * time )
So Future contract :
Buyer of contract will be us and seller will be the toy wholesaler
Long Position: We will have long position
Short Position: The wholesaler will have a short position
Delivery Date: 1 Dec 2020
Price : Price will follow this equation Future price = Spot price * exp (interest rate * time ) . Since interest rate is not given hence we are not calculating the actual price.
Part C )
A call is written when the seller is expecting that the price will not go more than the strike price (X) and buyer buys a call option when he expects that the price of the asset will go higher than the strike price.
Call option for this transaction:
Buyer: We will be the buyer and holder of call option
Seller: The wholesaler will be the writer of call option
Strike price: 70 (assumed)
Date: December 2020 . ( 9 months )
Toy: Teddy bear Current Price: $67.99 Need: 500 bears b. You are concerned about the availability...
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JOHNSON & JOHNSON AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Dollars and Shares in Millions Except Per Share Amounts) (Note 1)* 2016 71,890 21,789 50.101 20,067 9.143 29 Sales to customers Cost of products sold Gross profit Selling, marketing and administrative expenses Research and development expense In-process research and development Interest income Interest expense, net of portion capitalized (Note 4) Other (income) expense, net Restructuring (Note 22) Eamings before provision for taxes on income Provision for taxes on income (Note 8)...
JOHNSON & JOHNSON AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS (Dollars and Shares in Millions Except Per Share Amounts) (Note 1)* 2016 71,890 21,789 50.101 20,067 9.143 29 Sales to customers Cost of products sold Gross profit Selling, marketing and administrative expenses Research and development expense In-process research and development Interest income Interest expense, net of portion capitalized (Note 4) Other (income) expense, net Restructuring (Note 22) Eamings before provision for taxes on income Provision for taxes on income (Note 8)...
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