0. Theoretical part:

• - In your own words, provide 3 methods of buying stocks, and explain the transaction in detail (provide information about the transaction, for example, if one of your methods is buying from an online platform, mention CFDs and explain what it is and how does the transaction works including the kind of commission or fees paid).

• - In your own words, explain the differences between a broker, a dealer, and a specialist. When can a specialist act as a dealer and when can he act like a broker? Provide an example.

  Practical part:

  As an investor in the financial market, you have two situations that you can make a profit out of. Currently, the stock price is $30 per share. Identify the best strategy to follow for each case. (Assume 1000 shares for each case)

  First: When you expect that the price of BETA will decrease in 30 days to $25. The brokers initial margin requirement is 60% of the value of the position.

• - What will be your strategy and your position?

• - How much will you lose or gain if you closed your position after 30 days?

• - Do you receive a call if the price will be $25 per share?

• - What should be the price of the stock for you to receive a margin call? the maintenance margin

  is 25%.

  Second: When you expect that the price of BETA will increase in 30 days to $40. The brokers

  initial margin requirement is 60% of the value of the position.

• - What will be your strategy and your position?

• - How much will you lose or gain if you closed your position after 30 days?

• - Do you receive a call if the price will be $50 per share?

• - What should be the price of the stock for you to receive a margin call? the maintenance margin

  is 25%. HINT: draw the balance sheet for both cases before and after you take a position.