Mr. P. decides to short sell 10000 shares of Chegg Inc. at that time market price was $5.6. Hisbroker charged $1550 as commission and requested him to deposit 45% margin. During the shortperiod Chegg Inc paid a dividend of $0.25 per share. To close out the position Mr. P buys 10000shares of Chegg Inc. at $4.50 and the broker charged a commission of $1,450. Calculate the returnon the investment of Mr P.

Calculate the amount of investment made by the the investor by multiplying the number of shares…

Answered: Mr. P. decides to short sell 10000…

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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Jack an investor on day 1, buys 7000 shares of y Inc. At $29 per share with beta of 1.2 , he then sells 4000 shares of z Inc. At 39 per share with beta of 1.85 , jack also obtains a complete hedge by NASDAQ, futures at $1000, next day jack closes out his position , the NASDAQ futures dropped by 2% , share price of y Inc , dropped by 1.5% and the share price of zinc rosed by 1.5% what is the overall gain |loss of jack
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Mr. X has a limited cash balance of P1,000,000.00. (b) The buying price of the stock is P10 per share (c) Mr. X wants to purchase 150,000 shares (d) The broker wants to lend Mr. X the deficit in exchange of 3% simple interest per month. (e) the transaction cost in buying the shares is 0.10 per share Variable rate plus P20,000 Fixed rate. (f) On September 1, 2021, Mr. X purchased 150,000 shares at 10 per share Using the above details, Assuming on October 1, 2021, Mr. X wants to sell the 150,000 shares to Mr. Y for 10.90 per share with a corresponding transaction cost of 0.05 per share Variable Rate plus P10,000 Fixed rate. What is the net income/loss of Mr. X in selling the stocks to Mr. Y after deducting transaction costs and interest payment to the broker? If you were the Financial Advisor of Mr. X, would you advise him to sell the stocks to Mr. Y? Using the above details, Assuming on October 1, 2021, Mr. X wants to sell the 150,000 shares to Mr. Y for 10.10 per share with a…
Hannah bought 1,000 shares of Zoom Technologies stock at $15 from an initial public offering. Hannah sold the stock after it rose 40% on the opening day of trading. Hannah has a 24% effective tax rate and a 37% marginal tax rate. How much tax does Hannah owe from the stock sale? O $1,440. O $1,200. O $2,220. O $900. Save for Later Submit Answer
You purchase 240 shares of stock at $37.60 per share. Several months later you sell the shares at $33.10. Your broker charges 2% commission on round lots and 3% on odd lots. Calculate the gain or loss (in $) on the transaction.
Ghaith purchased 200 shares of stock at $19 using his 70% margin account. his maintenance margin is 40%. At what price will Ghaith receive a margin call?
Cullumber Imited purchased 45, 100 call options during the year. The options give the company the right to buy its own common shares for $9 each. The average market price during the year was $11 per share. Assume that Cullumber also wrote pur options that allow the holder to sell 45, 100 of culumbet's shares to cullumber at $13 per share
Hayes Company sold 10,000 shares of Kenyon Co. common stock for $27.50 per share, incurring $1,770 in brokerage commissions. These securities originally cost $260,000. Prepare the entry to record the sale of these securities.
16. ABC bought 100 common shares of XYZ. The price paid was $ 40, per share, plus he paid $ 280 in brokerage costs. The entry to register this purchase includes: Select one: a. debit to cash for $ 4,000. b. Debit to Investment in shares of $ 4,000. c. Debit to Investment in shares for $ 4,280. d. debit to brokerage expense of $ 280 and a debit to investment in shares of $ 4,000.
The ABC Corporation received subscription for 9,000 ordinary shares at P40/share, where P35 is the par value and received 40% downpayment. A month after 3,600 of said shares were in full while the rest paid an additional P20/share. By the end of the year, 500 of said subscribers were not able to pay and were declared as delinquent. How much would be debited as Receivable from highest bidder?
You purchase 280 shares of stock at $37.80 per share. Several months later you sell the shares at $33.10. Your broker charges 3% commission on round lots and 4% on odd lots. Calculate the gain or loss (in $) on the transaction. $_________

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