Questions from General Investment


Q: What is the intrinsic value of a put option? How do

What is the intrinsic value of a put option? How do we interpret this value?

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Q: You notice that shares of stock in the Patel Corporation are going

You notice that shares of stock in the Patel Corporation are going for $50 per share. Call options with an exercise price of $35 per share are selling for $10. What’s wrong here? Describe how you coul...

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Q: What is vesting in regard to employee stock options? Why would

What is vesting in regard to employee stock options? Why would a company use a vesting schedule with employee stock options?

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Q: What is the difference between the “retained earnings” number on

What is the difference between the “retained earnings” number on the income statement and that on the balance sheet?

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Q: What makes current assets and liabilities “current”? Are operating assets

What makes current assets and liabilities “current”? Are operating assets “current”?

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Q: In general, employee stock options cannot be sold to another party

In general, employee stock options cannot be sold to another party. How do you think this affects the value of an employee stock option compared to a market-traded option?

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Q: Which is larger, gross margin or operating margin? Can either

Which is larger, gross margin or operating margin? Can either be negative? Can both?

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Q: What is the relationship between net income and earnings per share (

What is the relationship between net income and earnings per share (EPS)?

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Q: Why do we say depreciation is a “noncash item”?

Why do we say depreciation is a “noncash item”?

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Q: In the context of the standard cash flow statement, what is

In the context of the standard cash flow statement, what is operating cash flow?

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