Question: A Ducati motorcycle costs $ 3 0 , 0 0 0 after tax. Trader A plans to finance the purchase of this motorcycle with winnings
A Ducati motorcycle costs $
after tax. Trader A plans to finance the
purchase of this motorcycle with
winnings from GME stock.
Trader A has $ On Monday,
Trader A goes all in on GME stock,
buying as many shares as possible for a
price of $ per share.
Trader A pays $ in total commission
and fees on this transaction and
expects to pay the same amount when
he sells his GME stock.
With their remaining capital, Trader A
purchases as many Dogecoin as they
can for a price of $ per Dogecoin
with no transaction cost.
Trader A asks Quant W to model the
expected price move per day, in
percentage terms relative to previous
day, of GME and Dogecoin over the next
days. At the end of Wednesday,
Trader A plans to sell their GME
holdings.
If Trader A can afford the Ducati,
Trader A will buy the Ducati, and put
the rest of their capital into Dogecoin.
If Trader A cannot afford it Trader A
will donate the money raised from
selling GME to the local homeless
shelter.
Based on Quant Ws model, what is the
expected number of Dogecoin Trader A
will own after Wednesday?
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