What would your rate of return have been now

Assignment Help Financial Management

Reference no: EM131814664

Suppose you purchase 850 shares of stock at $54 per share with an initial cash investment of $22,950. The call money rate is 5 percent and you are charged a 1.5 percent premium over this rate. Ignore dividends. a. Calculate your return on investment one year later if the share price is $62. Suppose instead you had simply purchased $22,950 of stock with no margin. What would your rate of return have been now? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) b. Calculate your return on investment one year later if the share price is $54. Suppose instead you had simply purchased $22,950 of stock with no margin. What would your rate of return have been now? (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) c. Calculate your return on investment one year later if the share price is $38. Suppose instead you had simply purchased $22,950 of stock with no margin. What would your rate of return have been now? (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

Reference no: EM131814664

Questions Cloud

What is your total dollar return from this investment : What is your total dollar return from this investment? What is your effective annual rate of return?

What is your net income if the spot rate : You sold a put option on the euro and received $.05. The exercise price is $1.10. What is your net income if the spot rate is $.80?

Substantial decrease in share value : DEF Industries has seen a substantial decrease in share value, which you expect to continue for the next several months.

Create portfolio consisting of position : Create a portfolio consisting of a position in 2500 shares of Alpha stock. 2) Create a portfolio consisting of a position in 25 3-month european put options.

What would your rate of return have been now : Suppose instead you had simply purchased $22,950 of stock with no margin. What would your rate of return have been now?

Indifferent between each portfolio : Which portfolio would you have been better off selecting if the Alpha sells for $57 when the options expire? You'd be indifferent between each portfolio

Calculate the value of delta : Calculate the value of delta if the value in each of the above accounts is equal after 7.25 years.

Find the trader profit and loss in dollars : Find the trader's profit/loss in dollars if BMC trades for $37 when the options expire.

Verify the DuPont Identity for Costco ROE : Compute Costco's net profit margin, total asset turnover and equity multiplier. Verify the DuPont Identity for Costco's ROE.

User Account

All Pages