If a trader developed a series of algorithms and bots to help her profit from predictable price trends, then which of the following algorithms would have resulted in the highest profit? (Note: Assume there were no transaction costs associated with the transactions and that purchase and sell orders occur immediately.) If the price of Humphry Incorporated's stock decreases by exactly $1 in 15 minutes, take the short position on 1,500 shares. Then, if the stock price decreases below $2, offset the short position. If the price of Humphry Incorporated's stock decreases by exactly $2 in 15 minutes, submit an order to purchase 3,000 shares. Then, if the stock price increases at all in any given 15-minute interval, submit an order to sell 3,000 shares. If the price of Humphry Incorporated's stock increases by exactly $1 in 15 minutes, submit an order to purchase 1,000 shares. Then, if the stock price increases above $8, submit an order to sell 1,000 shares. If the price of Humphry Incorporated's stock increases by exactly $1 in 15 minutes, submit the stock price increases above $7.25, submit an order to sell 6,000 shares. order to purchase 6,000 shares. Then, if

If a trader developed a series of algorithms and bots to help her profit from predictable price trends, then which of the following algorithms would have resulted in the highest profit? (Note: Assume there were no transaction costs associated with the transactions and that purchase and sell orders occur immediately.) If the price of Humphry Incorporated's stock decreases by exactly $1 in 15 minutes, take the short position on 1,500 shares. Then, if the stock price decreases below $2, offset the short position. If the price of Humphry Incorporated's stock decreases by exactly $2 in 15 minutes, submit an order to purchase 3,000 shares. Then, if the stock price increases at all in any given 15-minute interval, submit an order to sell 3,000 shares. If the price of Humphry Incorporated's stock increases by exactly $1 in 15 minutes, submit an order to purchase 1,000 shares. Then, if the stock price increases above $8, submit an order to sell 1,000 shares. If the price of Humphry Incorporated's stock increases by exactly $1 in 15 minutes, submit the stock price increases above $7.25, submit an order to sell 6,000 shares. order to purchase 6,000 shares. Then, if

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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Although investing all at once works best when stock prices are rising, dollar-cost averaging can be a good way to take advantage of a fluctuating market. Dollar-cost averaging is an investment strategy designed to reduce volatility in which securities are purchased in fixed dollar amounts at regular intervals regardless of what direction the market is moving. This strategy is also called the constant dollar plan. You are considering a hypothetical $1,200 investment in a media company's stock. Your choice is to invest the money all at once or dollar-cost average at the rate of $100 per month for one year. Assume that the company allows you to purchase "fractional" shares of its stock. (a) If you invested all of the money in January and bought the shares for $12 each, how many shares could you buy? shares (b) From the following chart of share prices, calculate the number of shares that would be purchased each month using dollar-cost averaging and the total shares for the year. Round to…
If you look at stock prices over any year, you will find a high and low stock price for the year. Instead of a single benchmark PE ratio, we have a high and low PE ratio for each year. We can use these ratios to calculate a high and a low stock price for the next year. Suppose we have the following information on a particular company. Year 1 $ 62.18 40.30 2.35 a. High target price b. Low target price Year 2 $67.29 43.18 2.58 Year 3- $74.18 39.27 2.73 Year 4 $78.27 46.21 High price Low price EPS Earnings are expected to grow at 9 percent over the next year. 6. What is the high target stock price in one year? 32.16. Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g.. b. What is the low target stock price in one year? Note: Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. 2.890
(i) Stock XYZ, which traded for several months at a price of K72, and then declines to K65. if the stock eventually begins to increase in price, K72 is considered a resistance level because investors who bought originally at K72 will be eager to sell their shares as soon as they can break even on their investment. If everyone in the market believes in resistance levels, why do these beliefs not become self-fulfilling prophecies? (ii) What would happen to market efficiency if all investors attempted to follow a passive strategy?
In an equity research report, an analyst calculates a forward earnings yield of 12 per- cent. Noting that this yield is considerably higher than the 7 percent yield on a 10-year Treasury, she heads her report with a buy recommendation. Could she be making a mistake?
Top-down research is being attempted by a street analyst. He intends to eliminate the stock with the lowest market share in its industry from his investment portfolio in order to realign it. Currently, he is considering the following stocks: Stock Name: ABCRevenue: 2,345,678.00Industry Sales: 27,000,579.88 Stock Name: DEFRevenue: 278,000.00Industry Sales: 2,897,000.90 Stock Name: GHIRevenue: 1,334,567.00Industry Sales: 8,700,899.76 Stock Name: JKLRevenue: 4,400,990.00Industry Sales: 6,678,999.00 Stock Name: MNORevenue: 13,000,000.00Industry Sales: 87,994,678.00 What stock is he going to get rid of?
Investors expect a company to announce a 9 percent decrease in earnings, but instead the company announces a 1 percent decrease. If the market is semistrong-form efficient, which of the following should happen? a. The stock’s price rises because the earnings decrease was less than expected. b. The stock’s price stays the same because earnings announcements have no effect if the market is semistrong-form efficient. c. The stock’s price decreases slightly because the company had a slight decrease in earnings.
CAN I GET HELP as soon as possible please Explain your answer for each of them. Show all your work. The required return on ABC stock is 14%. The risk-free rate of return is 4% and the real rate of return is 2%. How much are investors requiring as compensation for risk? A) 8% B) 10% C) 12% D) 14% The efficient market hypothesis suggests thatA) investors should not try to outguess the market by constantly buying and selling securities. B) investors do better on average if they adopt a "buy and hold" strategy.C) buying into a mutual fund is a sensible strategy for a small investor.D) all of the above are sensible strategies.E) only A and B of the above are sensible strategies.
You simultaneously write a put and buy a call, both with strike prices of $45, naked, i.e., without any position in the underlying stock. What are the expiration date payoffs to this position for stock prices of $35, $40, $45, $50, and $55? (A negative value should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required.) $ $ $ $ $ Stock price 35 40 45 50 55 Put payoff Call payoff Total payoff
84. You complete a test of autocorrelation on daily data for a thinly traded stock and the Durbin Watson statistic is 1.15. If the stock has a return of -0.33% late in the trading day and you are convinced that other investors are not aware of the results, based on the test results and probabilities, an investor would: Buy or long the stock in late trading. Sell or short the stock in late trading. Wait an additional day to buy the stock. Wait an additional day to short the stock. Take neither a long or short position in the stock. None of the above answers is correct.
Can small adjustments to a flow lead to large changes in a stock? Group of answer choices A.There is no way to determine if this is possible. B.Yes, given enough time. Even a small change in flow will accumulate over time. C.No. If the change in the flow is small, the change to the stock must also be small. D.Yes. If a penny is deducted from an account of $10,000, that change is large because every penny counts. E.No. Flows can’t change in small ways.
About market efficiency, which of the following statements is right:a. In a highly efficient stock market, it is almost impossible for an investor to make profit from the stock market.b. In a highly efficient stock market, some smart investors can definitely beat the market even without the inside information. c. An investor can make profit by buying the stock of free Inc. since it just reported that the half-year profit doubled with respect to that during the same period in the last year. d. The stock prices of big companies are closer to their intrinsic values than those of small companies since more people follow those big companies, whereas few people follow those small companies.

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