You start trading with an account worth $250,000. You decide that themost you want to risk on any trade is 0.5% of the account value.You've been following a stock and believe the appropriate entry point is$40 per share with an 8% trailing stop. Based on this information,what is your initial trade size?$15.625○ $50,000O $31,250○ $25,000

A trailing stop loss is like a guard for your money when you're trading toys or other things. It…

Answered: You start trading with an account worth…

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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The common stock of Anthony Steel has a beta of 1.1. The risk-free rate is 5 percent and the market risk premium (rm - rf) is 5 percent. What is the company's cost of common stock, rs? Express your answer in percentage (without the % sign) and round it to two decimal places.
You are considering purchasing a share of preferred stock with the following characteristics: par value = $100 dividend rate = 12% per year payment schedule = quarterly maturity date = required rate of return = 6% per year current market price = $135 per share Based on this information, answer the following: A. What is the dollar amount of the quarterly dividend on this stock? B. Using the Discounted Cash Flow Method, what is the dollar value of this stock? C. Using the Discounted Cash Flow Method, what is the annual expected return for this stock? D. Based on your answer to part B, should you invest in the stock? Why or why not? E.…
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You start trading with an account worth $2 most you want to risk on any trade is 0.5% of the account value. You've been following a stock and believe the appropriate entry point $40 per share with an 8% trailing stop. Based on this information, what is your initial trade size?