11. An investor with a long position in a security will make money: if the price...
11. An investor with a long position in a security will make money:
-
if the price of the security increases.
-
if the price of the security declines.
-
if the price of the security remains stable.
-
only if the security has been purchased on margin.
-
only by shorting the security.
Homework Answers
An investor with a long position in a security will amke money if the price of the security increases .
For example if an investor has a long position at $100 per stock , investor will make money if the price of the stock is above $100
Add Answer to:
11. An investor with a long position in a security will make
money:
if the price...
Assume that an investor has a long position in standard CME EUR futures contract (EUR 125,000)...
Assume that an investor has a long position in standard CME EUR futures contract (EUR 125,000) and that today’s settlement price is $1.1678 per euro. If the balance in the investor’s performance bond account is currently $2,500 and according to his/her broker’s margin rules new money must be deposited if the balance falls to $1,900, at what EUR futures settlement prices would his/her broker demand additional money be deposited?
Do not use Excel please, show work Margined Long Position Name Date Suppose that an investor...
Do not use Excel please, show work
Margined Long Position Name Date Suppose that an investor buys 300 shares on margin at $40 per share. The initial margin is 50% and the maintenance margin is 30%. After one year, the investor sells the shares for $38 and closes the long position. During the holding period, the shares paid a dividend of S1.30 per share. Interest on the margin loan is 7% annual. Show the calculations for the numbers you enter...
Exercise 1. An investor has a short position in a European put on a share for $4. The stock price is $40 and the strike price is $41 Under what cicum be cuercise (b) Under what circumstance does the...
Exercise 1. An investor has a short position in a European put on a share for $4. The stock price is $40 and the strike price is $41 Under what cicum be cuercise (b) Under what circumstance does the investor make a profit? (c) Draw a payoff diagram plotting the investor's payoff as a function of Sr. (d) Draw a profit diagram plotting the investor's profit as a function of ST. (e) Suppose now the investor enters also into a...
QUESTION 39 Problem 3a (5 pts.) An investor buys 2 Silver contracts (long position) on the...
QUESTION 39 Problem 3a (5 pts.) An investor buys 2 Silver contracts (long position) on the Chicago Board of Trade (CBOT) on May 7 for delivery in July that same year. The following information relates to the silver contract and silver prices on the date of purchase. • Current futures contract price: $15.00 per oz. • Size of contract: 5000 oz. • Initial margin requirement: 5% of initial contract value • Maintenance margin level: 3.5% of initial contract value 3A....
3. Define Short Sales. Make sure you explain what a long position and a short position...
3. Define Short Sales. Make sure you explain what a long position and a short position are. a. Now assume that that you short 500 shares of AT&T (T) at S50 per share. Your broker has a 40% initial margin. How does this look in the balance sheet? Liabilities and Account Equity b. Your broker has a maintenance margin of 30%. If the price of the stock falls to $30 per share, what is your new margin? Are you benefited...
30. An investor constructs a long straddle by buying an April $30 call for $4 and...
30. An investor constructs a long straddle by buying an April $30 call for $4 and buying an April put $30 for $3. If the price of the underlying shares is $27 at expiration, what is the profit on the position? a. -$4 b. -$2 c. $2 d. $3 31. Consider an option strategy where an investor buys one call option with an exercise price of $55 for $7, sells two call options with an exercise price of $60 for...
An investor purchased shares with a market price of $50 when the initial margin requirement was...
An investor purchased shares with a market price of $50 when the initial margin requirement was 70%. If the price increases to $60, the investor's rate of return, ignoring dividends and interest, is closest to: a. 20% b. 24% c. 29% d. 30%
An investor purchased on margin Orange Computer for $30 a share. The stock's price subsequently increased...
An investor purchased on margin Orange Computer for $30 a share. The stock's price subsequently increased to $50 a share at which time the investor sold the stock. If the margin requirement is 60 percent and the interest rate on borrowed funds was 7 percent, what would be the percentage earned on the investor's funds (excluding commissions)? What would have been the return if the investor had not bought the stock on margin?
D. decreases; demand for money E None of the above 3. Suppose the money supply remains...
D. decreases; demand for money E None of the above 3. Suppose the money supply remains constant and the money demand curve shifts left. This is illustrated on a graph of the money market as in the demand for money and that creates A an increase: an excess demand for money that is eliminated by rising prices B an increase: an excess demand for money that is eliminated by falling prices C a decrease: an excess demand for money that...
An increase in the price level when the money wage rate remains unchanged increases _______
The graph shows a long-run aggregate supply curve and a short-run aggregate supply curve. Draw an arrow along one of the curves that illustrate a rise in the price level when the money wage rate remains unchanged. Label it 1. Draw an arrow along one of the curves that illustrate a rise in the price level accompanied by the same percentage rise in the money wage rate. Label it 2.An increase in the price level when the money wage rate remains...
Do not use Excel please, show work
Margined Long Position Name Date Suppose that an investor buys 300 shares on margin at $40 per share. The initial margin is 50% and the maintenance margin is 30%. After one year, the investor sells the shares for $38 and closes the long position. During the holding period, the shares paid a dividend of S1.30 per share. Interest on the margin loan is 7% annual. Show the calculations for the numbers you enter...
Exercise 1. An investor has a short position in a European put on a share for $4. The stock price is $40 and the strike price is $41 Under what cicum be cuercise (b) Under what circumstance does the investor make a profit? (c) Draw a payoff diagram plotting the investor's payoff as a function of Sr. (d) Draw a profit diagram plotting the investor's profit as a function of ST. (e) Suppose now the investor enters also into a...
QUESTION 39 Problem 3a (5 pts.) An investor buys 2 Silver contracts (long position) on the Chicago Board of Trade (CBOT) on May 7 for delivery in July that same year. The following information relates to the silver contract and silver prices on the date of purchase. • Current futures contract price: $15.00 per oz. • Size of contract: 5000 oz. • Initial margin requirement: 5% of initial contract value • Maintenance margin level: 3.5% of initial contract value 3A....
3. Define Short Sales. Make sure you explain what a long position and a short position are. a. Now assume that that you short 500 shares of AT&T (T) at S50 per share. Your broker has a 40% initial margin. How does this look in the balance sheet? Liabilities and Account Equity b. Your broker has a maintenance margin of 30%. If the price of the stock falls to $30 per share, what is your new margin? Are you benefited...
30. An investor constructs a long straddle by buying an April $30 call for $4 and buying an April put $30 for $3. If the price of the underlying shares is $27 at expiration, what is the profit on the position? a. -$4 b. -$2 c. $2 d. $3 31. Consider an option strategy where an investor buys one call option with an exercise price of $55 for $7, sells two call options with an exercise price of $60 for...
An investor purchased shares with a market price of $50 when the initial margin requirement was 70%. If the price increases to $60, the investor's rate of return, ignoring dividends and interest, is closest to: a. 20% b. 24% c. 29% d. 30%
D. decreases; demand for money E None of the above 3. Suppose the money supply remains constant and the money demand curve shifts left. This is illustrated on a graph of the money market as in the demand for money and that creates A an increase: an excess demand for money that is eliminated by rising prices B an increase: an excess demand for money that is eliminated by falling prices C a decrease: an excess demand for money that...
Most questions answered within 3 hours.
-
Where is the error in this code sequence?
String s1 = "Hello";
String s2 = "ello";...
asked 10 months ago -
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance...
asked 10 months ago -
Consider this reaction:
Al2(SO4)3 (aq)+ BaCl3
(aq) Al2Cl6 (aq)- +
3BaSO4(s) . What is the...
asked 10 months ago -
Suppose that Savneet is considering increasing her
recent random sample from 20 car rentals to 40...
asked 10 months ago -
Trucks arrive at an unloading terminal at an average rate of 120
per hour.
Trucks arrive...
asked 10 months ago -
Why are methanol and ethanol completely soluble in water while
octanol is not very little soluble....
asked 10 months ago -
A facilities manager at a university reads in a research report
that the mean amount of...
asked 10 months ago -
When the CuSO4 is rehydrated by adding water to the anhydrous
compound, is this an endothermic...
asked 10 months ago -
A ray of sunlight is passing from diamond into crown glass; the
angle of incidence is...
asked 10 months ago -
A block of mass 0.249 kg is placed on top of a light, vertical
spring of...
asked 10 months ago -
how do the kidneys compensate in the presences of acidosis
a) trigger hyperventilate
b) reserve acid...
asked 10 months ago -
Question 501 pts
The rental rate of capital to the firm increases. Which of the
following...
asked 10 months ago