You have $3,000 to invest. You lose -16% (-$480 loss) when stock market goes down -4%. What
Question:
You have $3,000 to invest. You lose -16% (-$480 loss) when stock market goes down -4%. What is the Margin rate in this market?
You are a bond trader, and there has been a power failure in New York City. You and other traders have taken to a street corner in order to keep trading. You can buy or sell the following bonds with the following cash flows (or CF) at the following prices. All bonds mature at or before the end of year 3.
| Bond | Price | Coupon | Face Value |
A | 100.00 | 7% | $100 |
B | 95.00 | 3% | $100 |
C | 112.00 | 9% | $100 |
(Answers)
Bond | Price Today | Buy (shares) | Sell (shares) | Cash flow NOW | Cash flow Year 1 | Cash flow Year 2 | Cash flow Year 3 |
A | 100.00 | ||||||
B | 95.00 | ||||||
C | 112.00 | - | 4 | ||||
Total |
(Question 3)(Required)(Fed Model)
Current Earning is $100 per year and the Index is 2,000 and 10 year yield is 8% per year. (A)Analyze whether it is How much Over-priced or Under-priced or Fairly-priced and (B)Calculate the Fair Index Level. Show All Work(A) How much Over, Under, or Fairly Priced?
(B)Fair Index Levelis ____________________________________________________________
(Question 4) (Required)(Margin Trading)
You tell your broker to sell 1,000 shares @$100 ($100,000) and 50% margin requirement on short sales. You have $50,000 T-bills.
If maintenance margin on short sales = 30%. This means the equity in your account must be at least 30% of the value of your short position at all times.
How far could the stock price RISE before the investor would get margin call?
(Question 5) (Required)(Margin Trading)
Suppose an investor initially pays $6,000 toward the purchase of $10,000 worth of stock (100 shares at $100 per share), borrowing the remaining $4,000 from a broker.
If maintenance margin = 30%.
How far could the stock price fall before the investor would get margin call?
(PART 2)
(Question 6) (Normal, Delete, WILD)
Following is the financial information of two companies. Calculate the price of the two companies.
ABC Inc. | XYZ Inc | |
| PEG ratio | 8 | 4 |
| Earnings Per Share | $5.0 | $2.5 |
| Annual Growth rate of Earnings | 10% | 40% |
a) What is the stock price of ABC Inc.?
________________________________________________________ b) What is the stock price of XYZ Inc.?
(Question 7)(Normal, Delete, WILD)
| Item | Date | Amount |
| Authorized to issue | Jan. 2000 | 3000 shares |
| Issued | Feb.2000 | 1500 shares |
| Buyback by company | Jan.2016 | 400 shares |
| Debt | As of Today | $20,000 |
| Cash holdings | As of Today | $30,000 |
| Stock Price | As of Today | $100 per share |
a) Calculate Market Capitalization of this company?
________________________________________________________________________________ b) Calculate Enterprise Value of this company?
(Q8 - Q9) Stock = $76, C(K=$75) = $6, P(K=$75) = $5
(Question 8)(Normal, Delete, Wild)
What are the Max Loss and Maxi Profits per share in (Buy Stock and Buy Put option)
Name | Strategy | Nick Name | Total Profit or Losses (Including Stock and Option) | |
Maximum Profit | Maximum Loss | |||
Hanna h | Buy S & Buy Put | Married Put | $ | $ |
When ST = $ | When ST = $ |
(Question 9)(Normal, Delete, Wild)
What are the Max Loss and Max Profits per share in (Buy stock and Sell Call option)
Name | Strategy | Nick Name | Total Profit or Losses (Including Stock and Option) | |
Maximum Profit | Maximum Loss | |||
Melly | Buy S & Sell Call | Covered Call | $ | $ |
When ST = $ | When ST = $ |
Expert Answer:
To calculate the Margin rate in this market we need to consider the loss incurred when the stock mar... View the full answer
