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

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Please try to answer both in 30 minute just need final answer
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: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
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
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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