K Suppose that Tesla stock is currently selling at $261.29 per share. For each of the following situations (ignoring brokerage commissions), calculate the gain loss that Olivia Crowe realizes if she makes a 100-share transaction. (Enter all losses as negative numbers.) a. She sells short and repurchases the borrowed shares at $304.14 per share. b. She takes a long position and sells the stock at $304.14 per share. c. She sells short and repurchases the borrowed shares at $254.45 per share. d. She takes a long position and sells the stock at $254.45 per share. a. If she sells short and repurchases the borrowed shares at $304.14 per share, the gain or loss she realizes is $. (Enter a loss as a negative number and round to the nearest cent.)

K Suppose that Tesla stock is currently selling at $261.29 per share. For each of the following situations (ignoring brokerage commissions), calculate the gain loss that Olivia Crowe realizes if she makes a 100-share transaction. (Enter all losses as negative numbers.) a. She sells short and repurchases the borrowed shares at $304.14 per share. b. She takes a long position and sells the stock at $304.14 per share. c. She sells short and repurchases the borrowed shares at $254.45 per share. d. She takes a long position and sells the stock at $254.45 per share. a. If she sells short and repurchases the borrowed shares at $304.14 per share, the gain or loss she realizes is $. (Enter a loss as a negative number and round to the nearest cent.)

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question A, B & C please. A study guide question. Suppose you sell short Tesla which is currently trading at $300 per share. You put $30,000 as cash into your brokerage account with an initial margin of 50%. The maintenance margin is 35%. a)How many shares of Tesla can you sell short? b)How far can the stock price increase before you get a margin call? c)Assume Tesla pays a dividend of $10 per share after you sell it short. At what price, will you get a margin call?
R. You bought 100 shares of DataPoint for $25 per share and it is currently selling for $40 per share. Assume that the stock eventually declines to $31. In answering the following, please ignore brokerage commissions, margin interest costs, and other transaction costs Calculate your percentage Holding Period Return at the $31 price assuming that you placed a stop-sell order at $40 per share and the order executed at that price a. 60% b. 24% c. 37.50% d. 51.61%
P-2 Assume you bought 100 shares of Data Point for $25 per share, and it is currently selling for $40 per share. Assume the stock eventually declines to $31. Ignore brokerage commissions and margin interest costs. Calculate your percentage rate of return at the $31 price assuming that you placed a sell stop order at $40 per share and the order executed at that price. Calculate your percentage rate of return at the $31 price assuming you did not place the stop loss order. Calculate your percentage rate of return on your equity investment assuming you bought 100 shares of this stock on 50% margin when it was selling for $25, and you sold the stock for $40 per share.
points Return to question Item 7 Problem 3-19 (Algo) You are bearish on Telecom and decide to sell short 100 shares at the current market price of $36 per share. Required: a. How much in cash or securities must you put into your brokerage account if the broker’s initial margin requirement is 50% of the value of the short position? b. How high can the price of the stock go before you get a margin call if the maintenance margin is 30% of the value of the short position? (Round your answer to 2 decimal places.)
Assume you sell short 1,000 shares of common stock at $35 per share, with initial margin at 50%. What would be your rate of return if you repurchase the stock at $25 per share? The stock paid no dividends during the period, and you did not remove any money from the account before making the offsetting transaction. A. 25.63% B. 57.14% C. 20.47% D. 77.23%
You sell short 340 shares of Doggie Treats Inc. Which are currently selling at $27 per share. You post the 52% margin required on the short sale. If your broker requires a 26% maintenance margin, at what stock price will you get a margin call? (You earn no interest on the funds in your margin account and the firm does not pay any dividends) Multiple Choice $56,57 $32.57 $22.57 $27.57
which one is correct? QUESTION 11 Exhibit 1.7 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) You purchased 100 shares of GE common stock on January 1, for $29 a share. A year later you received $1.25 in dividends per share and you sold it for $28 a share. Refer to Exhibit 1.7. Calculate your holding period return (HPR) for this investment in GE stock. a. 0.9655 b. 1.0973 c. 1.0804 d. 1.0086 e. 1.0357
Q.An investor buys $16,000 worth of a stock priced at $20 per share using 60% initial margin. The broker charges 8% on the margin loan and requires a 35% maintenance margin. The stock pays a $1-per-share dividend in 1 year, and then the stock is sold at $23 per share. What was the investor's rate of return? Which one is correct: A.21.63% B.25.28% C.23.83% D.28%
Y6 Consider a stock priced at $40 that pays an annual dividend of $ 1 per share. An investor purchases the stock on margin, paying $20 per share and borrowing the remainder from the brokerage firm at 10 percent annual interest. a. If, after one year, the stock is sold at a price of $60 per share, what is the return on the stock? b. If investors had used only personal funds rather than borrowing funds, what would have been the stock return?
Question 6 You are interested in short selling 200 shares of Queen Company Limited. The initial margin is 55% and the maintenance margin is 35%. You sell the shares at $xx per share (xx is the last two digits of your student ID number, if the last two digits are 00, use 100). i) ii) iii) How much money do you have to add to your account and how much money is in your account in total? At what price will you get a margin call? If the price of the stock immediately increased by 30%, and you bought it back at that price, how much you lose (in $) and what would be the rate of return (in %) on your investment (assume no fees or interest costs)?
Assume you sell short 100 shares of common stock at BDT $50per share, with initial margin at 0.5. The stock paid dividends during the period of $2.5. and you did not remove any money from the account before making the offsetting transaction. The interest is 7% if price at time of covering your position reached48. maintenance margin is 0.32 percent, calculate what is your account value what is your equity what is your equity after price changes'? what is your actual margin at what price the broker will give you a margin callwhat is your account value what is your equity what is your equity after price changes'? what is your actual margin at what price the broker will give you a margin calle what is your return
Question 8 On 16th may 2021 you purchased some shares at a price of $78 per dollar a share and a year later you sold them for $92 a share. At the end of the year of purchase, you received a cash dividend of $2.5 a share. compute the holding period return on the share. show all the workings to justify your answer.

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