Tveslor Elliot buys shares of stock A for $10,000, while investor Michael takes a short -osition in stock A for $10,000. The price of stock A may go down to zero or increase with mit in the future. For whom of the two investors the maximal loss is bigger? Da. Michael
Tveslor Elliot buys shares of stock A for $10,000, while investor Michael takes a short -osition in stock A for $10,000. The price of stock A may go down to zero or increase with mit in the future. For whom of the two investors the maximal loss is bigger? Da. Michael
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please try to answer both in 30 minute just need final answer

Transcribed Image Text:Investor Elliot buys shares of stock A for $10,000, while investor Michael takes a short
position in stock A for $10,00. The price of stock A may go down to zero or increase with no
limit in the future. For whom of the two investors the maximal loss is bigger?
0 a. Michael
Ob. Eliot
O. The maximal loss is the same for Michael and Elliot
0 d. cannol be delermined
O e. None of the above

Transcribed Image Text:Which of the following assumptions is not used in CAPM?
O a. There are no taxes and transaction costs
O b. Investors are rational mean-variance optimizers
Oc. Investors cannot take short positions in stocks
O d. Investments are limited to publicly traded financial assets
O e. Each investor in the market is a price-taker
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