In a dealer's market, the bid and ask price of a stock is $31.06 and $31.33, respectively.You sell 100 shares and pay a flat fee of $5 to your broker. Your selling price and the totaltransaction cost are:A. $31.06, $13.5B. $31.33, $18.5C. $31.33, $13.5D. $31.06, $18.5

Transaction costs are costs brought about when buying or offering budgetary resources, such as…

Answered: In a dealer's market, the bid and ask…

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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You've borrowed $27,392 on margin to buy shares in bxnay, which is now selling at $42.8 per share. You invest 1280 shares. Your account starts at the initial margin requirement of 50% The maintenance margin is 35%. Two days later, the stock price changes to $49 per share. a. Will you receive a margin call? O Yes ONo b. At what price will you receive a margin cal? (Round your answer to 2 decimel pleces.)
you would like to buy shares of Sirius Satellite Radio (SIRI). The current ask and bid quotes are $3.96 and $3.93, respectively. You place a market buy order for 500 shares that executes at these quoted prices.How much money did it cost to buy these shares?
A stock is currently trading at $83. A long straddle was purhcased with a strike price of $85. The premium paid for the call was $4.40 and the premium paid for the put was $6.75. What would breakeven prices for the straddle at expiration?
Why are common sized financial statements useful? How do they differ from traditional financial statements in the way that they are calculated?
C) usually with the assistance of an investment banker. D) A and B. E) B and C. 2. You purchased 100 shares of ABC common stock on margin at $70 per share. Assume the initial margin is 50% and the maintenance margin is 30%. Below what stock price level would you get a margin call? Assume the stock pays no dividend; ignore interest on margin. A) $21 B) $50 C) $49 D) $80 E) none of the above 3. Assume you sell short 100 shares of common stock at $45 per share, with initial margin at 50%. What would be your rate of return if you repurchase the stock at $40/share? The stock paid no dividends during the period, and you did not remove any money from the account before making the offsetting transaction. A) 20% B) 25% C) 22% D) 77% E) none of the above 4. You purchased 1000 shares of common stock on margin at $30 per share. Assume the initial margin is 50% and the stock pays no dividend. What would the maintenance margin be if a margin call is made at a stock price of $24?
Given the following bid and ask prices quoted by a dealer: Bid price of $1.1250/€ and Ask price of $1.1255/€, which of the following statements best describes the Bid-Ask Spread as a percentage? The dealer expects to make a profit of $0.005/€ on each transaction. The Bid-Ask Spread is 0.0044% of the bid price. The Bid-Ask Spread is 0.005% of the transaction value. The Bid-Ask Spread represents the dealer's margin on top of the selling price.
What is the process of consideration of the payback period?
You started with a market price of $30 and 10,000 shares. Calculate number of shares after the split and the per share price: a. 2 for 7 split b. 3 for 2 split c. 2 for 5 split d. 3 for 1 split
Suppose that XTel currently is selling at $50 per share. You buy 800 shares using $30,000 of your own money, borrowing the remainder of the purchase price from your broker. The rate on the margin loan is 7%. Required:a. What is the percentage increase in the net worth of your brokerage account if the price of XTel immediately changes to (i) $56; (ii) $50; (ii) $44? (Leave no cells blank - be certain to enter "0" wherever required. Negative values should be indicated by a minus sign. Round your answers to 2 decimal places.) b. If the maintenance margin is 25%, how low can XTel’s price fall before you get a margin call? (Round your answer to 2 decimal places.) c. How would your answer to requirement b would change if you had financed the initial purchase with only $20,000 of your own money? (Round your answer to 2 decimal places.) d. What is the rate of return on your margined position (assuming again that you invest $30,000 of your own money) if XTel is selling after one…
21. If Fincorp stock trades in a dealer market with bid price of 55.25 and asked price of 55.50, a) Suppose you have submitted an order to your broker to buy at market. At what price will your trade be executed? b) Suppose you have submitted an order to sell at market. At what price will your trade be executed? c) Suppose you have submitted a limit order to sell at $55.62. What will happen? d) Suppose you have submitted a limit order to buy at $55.37. What will happen?
If an investor buys shares in a closed-end investment company for $46 and the net asset value is $53, what is the discount? If the company distributes $1, the net asset value rises to $58, and the investor sells the shares for a premium of 5 percent over the net asset value, what is the percentage earned on the investment?
Suppose that an investor purchases the common stock at the current market price of $58/share and simultaneously sells for $12 a call to buy the shares at the strike price of $50. At the expiration of the call, price of stock is $77. What is the net profit on the position for this investor? (Round your answer the nearest dollar, do not enter with the dollar sign)

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In a dealer's market, the bid and ask price of a stock is $31.06 and $31.33, respectively. You sell 100 shares and pay a flat fee of $5 to your broker. Your selling price and the total transaction cost are: A. $31.06, $13.5 B. $31.33, $18.5 C. $31.33, $13.5 D. $31.06, $18.5