In: Finance

An investor sells short 100 shares of XYZ stock at $62 and sells 1 XYZ Oct 60 put @$6. The maximum potential gain is: (Show your work).

ANSWER DOWN BELOW. FEEL FREE TO ASK ANY DOUBTS. THUMBS UP PLEASE.

Maximum potential gain = (Stock Short Sell price-Strike Price) + Put option Premium.

= (62-60)+6

= $8

On January 1, you sold short 100 shares of XYZ stock at $20
using a 50% initial margin. The interest rate on the margin account
is 10% annually. On April 1 (in three-months), you covered the
short sales by buying stock at a price of $15 per share. You paid
50 cents per share in commissions for each transaction. Assume you
received interest on all your assets, i.e. the sum of the short
sale proceeds and the margin.
1. What...

On January 1, you sold short 100 shares of XYZ stock at $20
using a 50% initial margin. The interest rate on the margin account
is 10% annually. On April 1 (in three-months), you covered the
short sales by buying stock at a price of $15 per share. You paid
50 cents per share in commissions for each transaction. Assume you
received interest on all your assets, i.e. the sum of the short
sale proceeds and the margin.
1. What...

On January 1, you sold short 100 shares of XYZ stock at $20
using a 50% initial margin. The interest rate on the margin account
is 10% annually. On April 1 (in three-months), you covered the
short sales by buying stock at a price of $15 per share. You paid
50 cents per share in commissions for each transaction. Assume you
received interest on all your assets, i.e. the sum of the short
sale proceeds and the margin.
1. What...

An investor short sells 200 shares of a stock for $ 68.67 per
share. The initial margin is 53 % , and the maintenance margin is
40 % . The price of the stock rises to $ 81.73 per share.
What is the margin, and will there be a margin call?
The margin in the account is ______ %. (Round to the nearest
percent.)
Because the current margin is (equal to, below or above) the
maintenance margin, there (will...

An investor buys three shares of XYZ at the beginning of 2002
for $100 apiece. After one year, the share price has increased to
$110 and he receives a dividend per share of $4. Right after
receiving the dividend, he buys two additional shares at $110.
After another year, the share price has dropped to $90, but the
investor still receives a dividend per share of $4. Right after
receiving the dividend, he sells one share at $90. After another...

An investor sells short 500 shares of ABC Corporation on June 1,
at a time when the price per share is $120. The position is closed
out 3 months later, August 31, when the price per share is $100. A
dividend of $4 per share was paid July 31, one month before the
short position is closed out.
Suppose that the investor must open a margin account at the time
the short position is taken. The margin required is 50%...

Question 1
a. You sell short 100 shares of stock
at a price of $100 per share with an initial margin of 65 percent
and maintenance margin of 25 percent. Show this in a “T” balance
sheet format, and calculate your margin.
Price = 100
Credit for short sale
Cash Deposit =
Liability: Market Value of short sale
Equity =
Total Assets =
Liabilities + Equity=
b. Margin =
c. If the price falls to $90 per share, show this...

Investor buys 200 shares of stock at $27.25 per share. Investor
sells the stock after one year. 1. What is the dollar amount of
gain and the percent of return if the stock is sold for $32.60 per
share? How much does the yield percentage increase to if the stock
received a per share dividend of $1.15 during the year? 2. What is
the dollar amount of loss and percentage of return if the stock
received a per share dividend...

An investor buys 100 shares of a stock, shorts 60 call options
on the stock with strike price of $20 and buys 60 put options on
the stock with strike price of $10. All options are one-year
European options. Draw a diagram illustrating the value of the
investor’s portfolio as a function of the stock price after one
year.

An investor buys 100 shares of a stock, shorts 50 call options
on the stock with strike price of $80 and buys 50 put options on
the stock with strike price of $40. All options are one-year
European options. Draw a diagram illustrating the value of the
investor’s portfolio as a function of the stock price after one
year.

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