What is the change in capital

Assignment Help Finance Basics
Reference no: EM133121991

You are running a hedge fund with a long position of 4,000 shares of IBM, and a short position of 6,000 shares of Intel. IBM is currently trading at $190 per share, and Intel is trading at $100 per share. Over the past year, the volatility of IBM's stock was 8% per day, the volatility of Intel's stock was 5% per day, and the correlation between the two company stocks was 0.6. Suppose your hedge fund's capital equals the value of its current positions. During the past year, there was one day in which IBM's shares fell 4%. On that same day, Intel's shares rose by 6%. What is the change in capital ($) for the fund that day?

Reference no: EM133121991

Questions Cloud

Why are standards so important in many high-tech industries : Why are standards so important in many high-tech industries? What are the competitive implications if this? Write a one or two page 8.5X11 short essay
Change in the fi market value of equity : If the entire yield curve shifted upward 0.15 percent (i.e., ?R/(1 + R) = 0.0015), what is the change in the FI's market value of equity?
What is the total return of your share investment : During the year, the share paid a $2.50 dividend and at the end of the year it traded at $55.65. What is the total return of your share investment
What is the bond nominal yield to call : The bond has a 5% nominal yield to maturity, but it can be called in 5 years at a price of $1,052.04. What is the bond's nominal yield to call
What is the change in capital : You are running a hedge fund with a long position of 4,000 shares of IBM, and a short position of 6,000 shares of Intel. IBM is currently trading at $190 per sh
Analyze the cash ?ow and retained earnings : To analyze the cash ?ow and retained earnings impact of a cyclical upturn in paper and linerboard prices (i.e., demonstrating the power of operating leverage in
Present the retained earnings reconciliation : Assuming that the change in policy was implemented retrospectively, present the retained earnings reconciliation that would appear
Analyse next generation sequencing data : Analyse next generation sequencing data and spectrometry data produced by different techniques - Producing a list of the individual's genomic variants
Calculate the payback period for project : a. Calculate the payback period for each project. Rank the projects by payback period.

Reviews

Write a Review

Finance Basics Questions & Answers

  Rust bucket motor credit corporation rbmcc a subsidiary of

rust bucket motor credit corporation rbmcc a subsidiary of rust bucket motor offered some securities for sale to the

  What is per share value of vandell to hastings corporation

Hastings estimates that if it acquires Vandell, interest payments will be $1.5 million per year for 3 years, after which the current target capital structure.

  What is the expected earnings and expected retained earnings

Common Stock costs $5 per share to issue, floatation cost for bonds is 5% and the bonds have ten years to maturity. Assume the growth rate in earnings and dividends to be constant over time and the payout rate to be the same as in the previous yea..

  Find size of the first payment

What would be the size of the first payment?

  Why does interest rate parity not hold

How do we know that this is an example of arbitrage opportunity? Why does interest rate parity NOT hold?

  What is the firm current receivables balance

what would be the firm's new receivables balance if Milwaukee Surgical toughened up on its collection policy with the result that all nondiscount customers paid on the 30th day?

  Identify 5 strategies before investing money

An investor has many choices that need to be made before investing his or her money. Identify 5 strategies that require to be reviewed before an investor can reach his or her personal aims.

  FIN320 Financial Management Assignment

FIN320 Financial Management Assignment Help and Solution, University of Bahrain - Assessment Writing Service

  Relative importance of different sectors and activities

According to the "Priority Rule", What are your expectations concerning the following:

  Field of quality management

Briefly describe the contributions W. Edward's Deming made to the field of quality management. would you regard him as the most influential quality expert?

  The district ese department has opened three pre

Additionally, the district ESE department has opened three pre-K handicapped programs at Happy Trails Elementary, serving the needs of the Pre-K handicapped population in the area. The Pre-K students are primarily classified as Speech/Language Impair..

  Calculate the expiration value of warrants

The Clayton Company has warrants outstanding that permits holder to buy one share of common stock per warrant at $30. Calculate the expiration value of Clayton's warrants if the common stock is currently selling at $20 per share?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd