After researching Best Buy common stock, Sally Wang is convinced the stock is overpriced. She contacts her account executive and arranges to sell short 400 shares of Best Buy. At the time of the sale, a share of common stock had a value of $160. Three months later, Best Buy is selling for $152 a share, and Sally instructs her broker to cover her short transaction. Total commissions to buy and sell the stock were $64. What is her profit for this short transaction?

Joseph Jones, a manager at Computer Science, Inc. (CSI), received 10,000 shares of company stock as part of his compensation package. The stock currently sells at $40 a share. Joseph would like to defer selling the stock until the next tax year. In January, however, he will need to sell all his holdings to provide for a down payment on his new house. Joseph is worried about the price risk involved in keeping his shares. At current prices, he would receive $400,000 for the stock. If the value of his stock holdings falls below $350,000, his ability to come up with the necessary down payment would be jeopardized. On the other hand, if the stock value rises to $450,000, he would be able to maintain a small cash reserve even after making the down payment. Joseph considers three investment strategies:a. Strategy A is to write January call options on the CSI shares with strike price $45. These calls are currently selling for $3 each.b. Strategy B is to buy January put options on CSI with…

Barbara Simmons purchased 100 shares of Home Depot stock for $187 per share, using as little of her own money as she could. Her broker has a 55% initial margin requirement and a 45% maintenance margin requirement. If the price of Home Depot stock falls to $142 per share, what does Barbara need to do?

Rowena bought 100 shares of Paper Mill stock at 150 pesos per share. The broker charged her 750 pesos per commission. Find the total cost of the stock. (with full solutions)

Tim works for a supplier of parts to a company named Robots Inc. (ROBOT). When Tim delivers parts one of his friends at ROBOT tells him about how the company's sales have tripled in the past quarter. Tim decides to buy 5,000 shares of ROBOT stock the day before the company announces its earnings. Following the earnings announcement, the stock price does not change...in fact, strangely, it goes down. Tim ends up losing over $1,000 on ROBOT stock, by the time he sells his shares. Based on current securities law in the United States, which of the following statements is most true? Group of answer choices Tim's intent was to conduct an illegal insider trade. However, since he did not make a profit on the transaction, he will most likely not be found guilty of insider trading. Everything Tim did was totally legal in the United States. Tim's trade is considered legal and is not considered an insider trade because Tim does not work for ROBOT. Tim is guilty of illegal insider trading and will…

Wanda Sotheby purchased 170 shares of Home Depot stock at $150 a share. One year later, she sold the stock for $55 a share. She paid her broker a commission of $44 when she purchased the stock and a commission of $51 when she sold it. During the 12 months she owned the stock, she received $138 in dividends. Calculate Wanda’s total return on this investment.

Given that Local Care, Inc.'s stock is currently selling for $65 a share, calculate the amount of money that Elijah Pearson will make (or lose) on each of the following transactions. Assume that all transactions involve 100 shares of stock, and ignore brokerage commissions. Input all answers as positive values.   He short-sells the stock and then repurchases the borrowed shares at $85.Total  of $   .   He buys the stock and then sells it some time later at $85.Total  of $   .   He short-sells the stock and then repurchases the borrowed shares at $50.Total  of $   .

Jessie B. purchases 450 shares of Smooth Sail Inc. for $50 per share at a time when the initial margin requirement is 60%. After two months, seeing that the price of Smooth Sail has fallen to $40 per share, Jessie wishes to buy an additional 200 shares. By this time, the initial margin requirement has gonedown to 50%. Will Jessie be able to do some pyramiding? What is the amount of margin he will be required to provide for his second transaction? Answer the question showing calculations.

Bob invested 3,000 and borrowed 3,000 to purchase shares in Verizon communications. At the time of his investment Verizon was selling for 47 a share. If bob paid a 30 commission how many shares could he buy if he used only his own money and did not use margin?

David Gain is the chief executive officer (CEO) of Forest Media Corp., which is interested in acquiring RS Communications, Inc. To initiate negotiations, Gain meets with RS's CEO, Gill Raz, on Friday, July 12. Two days later, Gain phones his brother, Mark, who buys 3,800 shares of RS stock on the following Monday. Mark discusses the deal with their father, Jordan, who buys 20,000 RS shares on Thursday. On July 25, the day before the RS bid is due, Gain phones his parents' home, and Mark buys another 3,200 RS shares. Over the next few days, Gain periodically phones Mark and Jordan, both of whom continued to buy RS shares. On August 5, RS refuses Forest's bid and announces that it is merging with another company. The price of RS stock rises thirty percent, increasing the value of Mark's and Jordan's shares by nearly $660,000 and $400,000, respectively. Is Gain guilty of insider trading? What is required to impose sanctions for this offense? Could a court hold Gain liable? Why or why…