Question

In: Finance

Suppose you invest in 100 shares of Harley-Davidson (HOG) at $40 per share and 200 shares...

Suppose you invest in 100 shares of Harley-Davidson (HOG) at $40 per share and 200 shares of Yahoo (YHOO) at $25 per share. If the price of HOG increases to $50 and the price of YHOO decreases to $12 per share, what is the return on your portfolio? (Assume no dividends on either stock).

Solutions

Expert Solution

Solution :

The return on the portfolio is = - 17.78 %

Please find the attached screenshot of the excel sheet containing the detailed calculation for the above solution.


Related Solutions

If Harley Davidson stock is trading for $25/share and you want to buy 100 shares in...
If Harley Davidson stock is trading for $25/share and you want to buy 100 shares in your brokerage account which has an initial margin requirement of 50%, what dollar amount will the stock purchase cost you? Select one: a. $25 b. $1,250 c. $2,500 d. $5,000 Clear my choice Question 3 Refer again to question 2 (see below) supposing that you bought the Harley Davidson (HOG) stock on margin and then sold it for $30/share. What would be your return...
You bought 200 shares of Microsoft at $50 per share. 100 shares of IBM for $100...
You bought 200 shares of Microsoft at $50 per share. 100 shares of IBM for $100 per share, and $300 shares of Amazon. com for $35 per share. what is the portfolio weight on the Amazon.com holding?
Suppose you short-sell 100 shares of IBM, now selling at $200 per share.
  Suppose you short-sell 100 shares of IBM, now selling at $200 per share.   a. What is your maximum possible loss? b. What happens to the maximum loss if you simultaneously place a stop-buy order at $210? 2. Old Economy Traders opened an account to short-sell 1,000 shares of Internet Dreams at $40. The initial margin requirement was 50%. (The margin account pays no interest.) A year later, the price of Internet Dreams has risen from $40 to $50,...
An investor purchased 200 shares of stock at $100 per share on 65% margin. Suppose the...
An investor purchased 200 shares of stock at $100 per share on 65% margin. Suppose the maintance margin is 40% at what price does the investor get a margin call? Regarding the previous question, if the price declines to $70 per share whats the return to the investors equity? What if the stock price rises to $150 per share? ignore interest and transaction costs.
a) Suppose that you buy 200 shares of XYZ at $80 per share and that you...
a) Suppose that you buy 200 shares of XYZ at $80 per share and that you finance $6,000 of your investment with a margin loan at 6% interest. What is your initial margin? b) Suppose that you buy 200 shares of XYZ at $80 per share and that you finance $6,000 of your investment with a margin loan at 6% interest. If the price of one share of Company XYZ goes up 8% over the course of a year, what...
You purchase 200 shares of LPT Company at $100 per share using a 60% margin. The...
You purchase 200 shares of LPT Company at $100 per share using a 60% margin. The minimum initial margin is 50% and your maintenance margin is 25%. How low can the stock price fall before you receive a margin call?
1) Assume you buy 100 shares of stock at $40 per share on margin. The initial...
1) Assume you buy 100 shares of stock at $40 per share on margin. The initial margin is 50%. If the price rises to $55 per share, what is your percentage gain on the initial equity?
Suppose you bought 100 shares of stock at an initial price of $37 per share. The...
Suppose you bought 100 shares of stock at an initial price of $37 per share. The stock paid a dividend of $0.28 per share during the following year, and the share price at the end of the year was $41. (1) What is your total dollar return on this investment? (2) What is the percentage return on the investment?
Suppose that you sell short 200 shares of Xtel, currently selling for $80 per share, and...
Suppose that you sell short 200 shares of Xtel, currently selling for $80 per share, and give your broker $10,000 to establish your margin account. a. If you earn no interest on the funds in your margin account, what will be your rate of return after one year if Xtel stock is selling at: (i) $85; (ii) $80; (iii) $75? Assume that Xtel pays no dividends. (Leave no cells blank - be certain to enter "0" wherever required. Negative values...
Suppose that you sell short 200 shares of Xtel, currently selling for $50 per share, and...
Suppose that you sell short 200 shares of Xtel, currently selling for $50 per share, and give your broker $6,000 to establish your margin account. a. If you earn no interest on the funds in your margin account, what will be your rate of return after one year if Xtel stock is selling at: (i) $56; (ii) $50; (iii) $45? Assume that Xtel pays no dividends. b. If the maintenance margin is 25%, how high can Xtel’s price rise before...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT