In anticipation of a rise in the stock index, John bought five contracts on August 8 at a premium of 2 points per contract (transaction unit multiplier of $50). What is John's profit or loss if the stock index rises to 77 points on September 12, the exercise date?
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In anticipation of a rise in the stock index, John bought five contracts on August 8 at a premium of 2 points per contract (transaction unit multiplier of $50). What is John's profit or loss if the stock index rises to 77 points on September 12, the exercise date?
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- 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?Alicia placed an order with her broker to purchase 500 shares of each of three IPOs that are being released this month. Each IPO has an offer price of $16 a share. The number of shares allocated to Alicia along with the closing stock price at the end of the first day of trading for each stock, are as follows: What is Alicia's total profit or loss on these three stocks as of the end of the first day of trading for each stock? (table in images)Investor John enters into a seven-month forward contract on a dividend-paying stock when the stock price is $40 and the risk-free rate of interest is 5% per annum with continuous compounding. The stock will pay a dividend of $1.50 per share in three months. Calculate the theoretical forward price of this stock. If the actual forward price is $42, is there an arbitrage opportunity for John? Show in detail how John can earn a profit. How much is this profit on a per share basis?
- Investor John enters into a seven-month forward contract on a dividend-paying stock when the stock price is $40 and the risk-free rate of interest is 5% per annum with continuous compounding. The stock will pay a dividend of $1.50 per share in three months. Calculate the theoretical forward price of this stock. If the actual forward price is $42, is there an arbitrage opportunity for John? Show in detail how John can earn a profit. How much is this profit on a per share basis? Both parts.The following lists the six New York Stock Exchange volume leaders on June 24. An investor buys 100 shares of GE at the Last Trade price, pays a $100 commission on the purchase, and sells the 100 shares a year later for $37.78 per share with a 2% commission on the sale. (a) Find the total cost.$ (b) Find the total dividend.$ (c) Find the commission when selling the shares.$ (d) Find the capital gain when selling the shares.$ (e) Find the total return for the year.$ (f) Find the percent of return. (Round your answer to two decimal places.)Sam purchased Walsh stocks at $200 per share three month ago and did not receive anydividends so far. If his target is to earn a 20% APR on the investments, at what stock price couldhe sell the stock now? (Hint: what is the HPR for 3 months?)
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- A six-month call is the right to buy stock at $19. Currently, the stock is selling for $22, and the call is selling for $6. You buy 100 shares ($2,200) and sell one call (in other words, you receive $600). Does this position illustrate covered or naked call writing? This position illustrates a call. If, at the expiration date of the call, the price of the stock is $32, what is your profit on the combined position? Round your answer to the nearest dollar. $ per 100 shares If, at the expiration date of the call, the price of the stock is $18, what is your profit on the combined position? Round your answer to the nearest dollar. $ per 100 sharesLast year, you purchased 700 shares of GreenZone Energy Corp stock at $630 per share. You later sold all the shares for $675 per share. What is your holding period return on this investment? Enter your answer as a percentage rounded to 2 decimal places.As the same investor, you put in a limit order to purchase the above company at $12.00 per share at 12:00P.M. on June 15. At 3:00P.M. the stock was selling for 11¾. Was your order executed?