You have an initial capital of $1000 and purchase $800 worth of Stock A. You also sell short $600 worth of Stock B. After one month, the price of Stock A increases from $10 to $11 per share. Stock A pays a dividend of $1 per share each month. The price of Stock B increases from $10 to $t0.25. Stock B pays a dividend of $0.25 per share each month. The interest rate on short proceeds and cash in the account is 0.5% per month. The borrowing fee is 1% annually. What will be your profit/loss in this month? ✓133.50 130.00

You have an initial capital of $1000 and purchase $800 worth of Stock A. You also sell short $600 worth of Stock B. After one month, the price of Stock A increases from $10 to $11 per share. Stock A pays a dividend of $1 per share each month. The price of Stock B increases from $10 to $t0.25. Stock B pays a dividend of $0.25 per share each month. The interest rate on short proceeds and cash in the account is 0.5% per month. The borrowing fee is 1% annually. What will be your profit/loss in this month? ✓133.50 130.00

Name: Pls solve this question correctly in 5 min i will give u like for sure
Uploaded: 2024-03-20T06:51:32.000Z
Channel: Bartleby
Description: Pls solve this question correctly in 5 min i will give u like for sure Question 5You have an initial capital of $1000 and purchase $800 worth of Stock A. You also sell short $600 worth of Stock B. After one month,the price of Stock A increases from $

PFIN (with PFIN Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)

6th Edition

ISBN:9781337117005

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter12: Investing In Stocks And Bonds

Section: Chapter Questions

Problem 2FPE

See similar textbooks

Similar questions

Return on Common Stock You buy a share of The Ludwig Corporation stock for $21.40. You expect it to pay dividends of $1.07, $1.1449, and $1.2250 in Years 1, 2, and 3, respectively, and you expect to sell it at a price of $26.22 at the end of 3 years. Calculate the growth rate in dividends. Calculate the expected dividend yield. Assuming that the calculated growth rate is expected to continue, you can add the dividend yield to the expected growth rate to obtain the expected total rate of return. What is this stock’s expected total rate of return (assume the market is in equilibrium with the required return equal to the expected return)?
3
Y6 Consider a stock priced at $40 that pays an annual dividend of $ 1 per share. An investor purchases the stock on margin, paying $20 per share and borrowing the remainder from the brokerage firm at 10 percent annual interest. a. If, after one year, the stock is sold at a price of $60 per share, what is the return on the stock? b. If investors had used only personal funds rather than borrowing funds, what would have been the stock return?
te.3
Goldstar.com pays a $1 dividend in every six months and will maintain this policy forever. What price should you pay for one share of common stock if you want an annual return of 15% on your investment? O A. $10.00 O B. $6.67 Oc. $26.67 O D. $13.33
1. You purchase 100 shares for $50 a share ($5,000), and after a yearthe price rises to $60. What will be the percentage return on yourinvestment if you bought the stock on margin and the marginrequirement was? a.25 percent b.50 percent c.75 percent 2. Repeat Problem 1 to determine the percentage return on yourinvestment but in this case suppose the price of the stock falls to$40 per share. What generalization can be inferred from youranswers to Problems 1 and 2? 3. How many years will it take for 197000 dollars to grow to 554000 dollars if it is invested in an account with a quoted annual interest rate of 8 percent with monthly compounding interest?
An investor buys 300 shares of stock selling at $66 per share using a margin of 66%. The stock pays annual dividends of $1.00 per share. A margin loan can be obtained at an annual interest cost of 302 %. Determine what return on invested capital the investor will realize if the price of the stock increases to $88 within six months. What is the annualized rate of return on this transaction? Question content area bottom Part 1 If the price of the stock increases to $88 within six months, the six-month return on this transaction is .......................%. (Round to two decimal places.)
On January 1, you bought 100 shares of ABD stock for $19/share with funds that you borrowed at an annual rate of 8%. The stock paid dividends per share of $1.50 at the end of the first year, and of $2.20 at the end of year two. What rate of return did you earn if you sold the stock for $21/share at the end of year two. Group of answer choices 14.52 % 12.52 9.99 13.33 15.12. Flag question: Question 22 The NPV of the investment was, Group of answer choices $ 5.70 2.28 4.28 3.28 1.68.
Answer ASAP
pls help
Q.An investor buys $16,000 worth of a stock priced at $20 per share using 60% initial margin. The broker charges 8% on the margin loan and requires a 35% maintenance margin. The stock pays a $1-per-share dividend in 1 year, and then the stock is sold at $23 per share. What was the investor's rate of return? Which one is correct: A.21.63% B.25.28% C.23.83% D.28%
Try Yourself - Question 2 Six years ago, I bought 200 shares of Disney at $26 per share. The stock had a 2:1 split followed by a 3:1 split. It now trades for $7.34 per share. What is the rate of return on my investment? A. The rate of return on my investment is 9.18% B. The rate of return on my investment is 4.11% C. The rate of return on my investment is 3.23% D. The rate of return on my investment is 9.09% E. The rate of return on my investment is 5.15%