What is the percentage return

Assignment Help Financial Accounting
Reference no: EM132942597

In November an investor wishing to utilize a hedging technique creates a covered call position as follows:

He purchases 400 shares stock at $42 and simultaneously sells 3 February 47 1/2 calls at $2.25

Problem 1: In January the stock is trading at $46 and the calls at $2.75. The investor decides to "unwind" his position and liquidate all shares owned. Ignoring commissions, what is his percentage return?

Reference no: EM132942597

Questions Cloud

Prepare dated journal entries for sarnia inc : Prepare dated journal entries for Sarnia Inc for 2019 to account for its investment in London Ltd. and any related income therefrom
Determine X for Andrea : Determine X. Andrea plans to make 20 annual deposits of 100 each into a fund in order to accumulate a target amount of K on the due date.
Define standard costing : Define Standard Costing. What is the formula for predetermined overhead rate? Differentiate Absorption Costing and Variable Costing
Compute the repayment profile for a lease : Compute the repayment profile for a lease, base equipment price of $ 550k, as per the assumptions, A tenor of 24 months, A financing rate of 35%
What is the percentage return : The investor decides to "unwind" his position and liquidate all shares owned. Ignoring commissions, what is his percentage return?
Discuss the role of audit committee of the companies : Discuss the role of Audit Committee of the Companies and the way for ensuring good governance
How do determine the times interest earned ratio : How do determine the Times Interest Earned Ratio. For the FY 2018, Frederick Company had net sales of $800,000 and net income of $100,000.
Find for december the amount of earnings per share : Determine for December 31, 2020 the amount of Earnings per Share. On July 1, 2020 Baltimore issued an additional 5,000 shares of common stock.
Determine the budgeted units of inventory for march : Determine the budgeted units of inventory for March 31. The Cardinal Company had a finished goods inventory of 55,000 units on January 1.

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

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