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 buy 100 shares of stock at $20 per share on margin of 40 percent.  If the...
You buy 100 shares of stock at $20 per share on margin of 40 percent.  If the price of the stock rises to $40 per share, what is your percentage gain in equity?  Disregard interest costs. PLEASE TYPE OUT
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?
Suppose you buy 200 shares of stock ABC at $50 per share and sell it in...
Suppose you buy 200 shares of stock ABC at $50 per share and sell it in a year. The initial margin is 40%. The call money rate is 7%. One year later, stock price decreases 20% to $40. What's the rate of return of buying on margin? A. -57.5% B. -60.5% C. -62.5% D. -70%
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?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT