share. She owns RM15,000 to invest and the minimum initial margin requirement is 50%. She held the stock for exactly four months and sold it without any brokerage cost at the end of that period. During the four-month holding period, the stock paid RM1.50 per share in cash dividends. Amelia was charged 8% annual interest on the margin loan. The minimum maintenance margin was 30%. While her husband, Afiq prefer to trade in stock futures. Afiq are bearish on Sunway stock and decide to short sells 300 shares. The initial margin is 50%, and the maintenance margin is 35%. A year later, Sunway price has risen from RM25 to RM37, and the stock has paid a dividend of RM2.00 per share. Required:

share. She owns RM15,000 to invest and the minimum initial margin requirement is 50%. She held the stock for exactly four months and sold it without any brokerage cost at the end of that period. During the four-month holding period, the stock paid RM1.50 per share in cash dividends. Amelia was charged 8% annual interest on the margin loan. The minimum maintenance margin was 30%. While her husband, Afiq prefer to trade in stock futures. Afiq are bearish on Sunway stock and decide to short sells 300 shares. The initial margin is 50%, and the maintenance margin is 35%. A year later, Sunway price has risen from RM25 to RM37, and the stock has paid a dividend of RM2.00 per share. Required:

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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Similar questions

William bought one ABC $45 call contract (i.e., the exercise price is $45) for a premium of $5 per share. At expiration, he excised his right. The return on his investment hinges on the stock price at expiration. Which of the following is false? If the stock price at expiration is $57, his return is 166.67%. O If the stock price at expiration is $50, his return is 22.22%. O If the stock price at expiration is $52, his return is 55.56%. O If the stock price at expiration is $60, his return is 233.33%.
An investor puts up $16,000 but borrows an equal amount of money from his broker to double the amount invested to $32,000. The broker charges 8% on the loan. The stock was originally purchased at $40 per share, and in 1 year the investor sells the stock for $45. The investor's rate of return was Multiple Choice O O 16.50% 8.50% 17.00% 4.50%
For four years, Marty Campbell invested $6,000 each year in Harley-Davidson. The stock was selling for $78 in 2017, $66 in 2018, $53 in 2019, and $65 in 2020. a. What is Marty's total investment in Harley-Davidson? Total investment b. After four years, how many shares does Marty own? (Round your intermediate calculations and final answer to nearest whole number.) Number of shares c. What is the average cost per share of Marty's investment? (Use the rounded number of shares computed in part b. Round your answer to 2 decimal places.) Average cost per share
Kai has $25,000 in his margin account. His broker pays 1% (continuously compounded) interest on cash balances. Kai sells 100 shares of JASA short at $175 / share. The broker charges commission of $0.01 per share, and charges 0.25% (cont. compounded) interest on the value of the stock loan. How much cash is in Kai's account immediately after the short sale? a. $25,000 b. $17,499 c. $42,500 d. $42,499 e. $17,500
Jeff Sellers bought 200 shares of ATL stock at $29.38. Eight months later, he sold the stock at $31.63. Assuming a 2% commission charge, what is the bottom line for Jeff? (Round your answer to the nearest cent.)
Joyce has never invested in shares before. She has come to you, as a prospective finance graduate, for some advice. In your conversations with Joyce, you have determined her Required Rate of Return (RRR) to be 8.75%. d) Joyce decided to buy 200 000 shares in GGG Ltd., giving her 2% ownership in the company (GGG Ltd. currently has 10 000 000 issued shares). One year later, GGG Ltd. announces a private placement of a further 10,000,000 shares, in order to raise funds for their new venture: Project COVID. (i) Describe two features of a private placement of shares. (ii) What is the major disadvantage to Joyce of the above private placement? Include in your answer the effect on her ownership. (iii) Identify one other source of equity funding Joyce, as a shareholder, would prefer. Justify your choice.
A) Sam bought 3000 units of shares from Company A at a price of RM2.00 per unit. The company pays a 5% dividend to shareholders at the end of the year. Sam sold all the shares and made a profit of RMO.50 per share. Calculate the total return on investment.
Shirly has $1000 and bought ABC holding's Berhad's share at $50 in February. One month later, she bought a put option at $6 with a strike price of $60. Calculate her profit when the share price is as follows I) $20 II) $80
Jessie B. purchases 450 shares of Smooth Sail Inc. for $50 per share at a time when the initial margin requirement is 60%. After two months, seeing that the price of Smooth Sail has fallen to $40 per share, Jessie wishes to buy an additional 200 shares. By this time, the initial margin requirement has gonedown to 50%. Will Jessie be able to do some pyramiding? What is the amount of margin he will be required to provide for his second transaction? Answer the question showing calculations.
Azaria own 1,000 shares of Levilla's Inc. Levilla follows a constant dividend policy, implying that it will pay the same dividend per share each year indefinitely. The dividend per share is $2.30 per year. You intend to invest in Levilla’s stock and hold it for 2 years. At the same time, you would like to receive at least $17 per share as dividend in the second year. You wish to achieve your goal by following the homemade dividends strategy in a world without taxes. Will you be able to do so? Substantiate your answer through relevant computations. Investors require a return of 15% on Levilla’s stock.
Tammy Jackson purchased 109 shares of All-American Manufacturing Company stock at $33.60 a share. One year later, she sold the stock for $41 a share. She paid her broker a $35 commission when she purchased the stock and a $43 commission when she sold it. During the 12 months she owned the stock, she received $198 in dividends. Calculate Tammy's total return on this investment. Note: Round all intermediate calculations and final answer to the nearest whole number. Total return
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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