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- You decide to sell short 100 shares of Charlotte Horse Farms when it is selling at its yearly high of R56. Your broker tells you that your margin requirement is 45 percent and that the commission on the purchase is R155. While you are short the stock, Charlotte pays a R2.50 per share dividend. At the end of one year, you buy 100 shares of Charlotte at R45 to close out your position and are charged a commission of R145 and 8 percent interest on the money borrowed. What is your rate of return on the investment?You decide to sell short 300 shares of Charlotte Horse Farms when it is selling at its yearly high of $56. Your broker tells you that your margin requirement is 50 percent and that the commission on the purchase is $480. While you are short the stock, Charlotte pays a $2.25 per share dividend. At the end of one year, you buy 300 shares of Charlotte at $42 to close out your position and are charged a commission of $460 and 8 percent interest on the money borrowed. What is your rate of return on the investment? Do not round intermediate calculations. Round your answer to two decimal placesYou decide to sell short 100 shares of Github Industries when it is selling at its yearly high $56. Your broker tells you that your margin requirement is 45 % and that the commision on the purchase is $155. While you are short the stock, Github pays a $2.50 per share dividend. At the end of one year, you buy 100 shares of Github at $45 to close out your position and are charged a commision of $145 and 8 % interest on the money borrowed. What is your rate of return on the investment?
- Al Rodriguez sells 500 shares of Gold Mine Corp. short at $80 per share. The margin requirement is 50 percent. The stock falls to $62 over a three-month time period, and he closes out his position. How much is his initial margin? What is his percentage gain or loss on his initial margin? If he is in a 35 percent tax bracket for short-term capital gains and a 15 percent bracket for long-term capital gains, what is his tax obligation? If the stock went up to $94 instead of down to $62, what would be his dollar loss? Assuming this is his only transaction for the year, how large a tax deduction could he take against other income?You sell short 400 shares of MIZ which are currently selling at $ 15 per share . You post the 30 % margin required on the short sale . If you earn no interest on the funds in your margin account what will be your rate of return after one year if MIZ is selling at $ 12Tom Hank buys 150 shares of J.W stock for $85 per share and a three-month J.W call option with an exercise price of $105 for $15. What is his dollar gain if the stock is selling for $80 per share at expiration? a) $500 gain b) $750 loss c) $3000 loss d) $2250 loss e) $6750 gain
- You short-sell 150 shares of ABC Co., now selling for $30 per share. If you wish to limit your loss to $1,300, you ishould place a stop-buy order atXYZ purchased a call option 3 months ago for $300 ($3 per share). It gives XYZ the right to buy 100 shares in Morley Tobacco for $20 per share. The call option expires today. What is the lowest price that XYZ should exercise at and what is that lowest price at which XYZ would realize a profit?Lauren has a margin account and deposits $49,994 into it. Assume the prevailing margin requirement is 40%, interest and commisions are ignored, and the Gentry Wine Corporation is selling at $35 per share. a) How many shares can Lauren purchase using the maximum allowable margin? b) What is Lauren's profit (loss) if the price of Gentry's stock 1) rises to $45 and Lauren sells the stock? 2) falls to $25 and Lauren sells the stock? c) If the maintenance margin is 30% to what price can Gentry Wine fall before Lauren will receive a margin call?
- On March 1st, Frank opens a brokerage account and sell shorts 200 shares of Doggie Treats Inc. at $60 per share. The initial margin requirement is 50%. a. What is the margin in Frank’s account when he first sells the stock? b. The stock pays a cash dividend of $1 on March 28th, and the share price falls to $50 per share by the end of March, what is the remaining equity in his account? c. What is the monthly rate of return on his margined position?You plan to buy a common stock and hold if tor one year. You expect to receive both ₱150 and ₱260 form the sale of the stock at the end of the year. How much will you pay for the stock, if you want to a. Have a return of 8% b. A return of 10% c. A return of 15% Problem 2: You bought 400 shares of Heavy Metal Inc. at ₱300 per share over the year, you received ₱75 per share in dividends. IF the shares were sold for ₱330 at the end of the year, what was your peso return? And percentage of return. Problem 3: Given six years of percentage return of Stock A and Stock B, identify the expected return, and risk of each instrument. Assume that each year, has equal chances of reoccurrence. Stock A Stock B 20X1 10 20 20X2 -15 -20 20X3 20 -10 20X4 25 30 20X5 -30 -20 20X6 20 60 a. Which of the two stocks is riskier? Why? b. Which of the stocks is expected to yield a higher return? Why? c. Where will you invest?In you cash account, you buy 100 shares of XYZ Corporation at a price of $10 per share. Two months later, XYZ pays a dividend $0.21 per share. You sell all 100 shares of XYZ three months later at a price of $12 per share. What is your total return on this trade?
