is believed that Blue Co.’s stock price is going to decline from its current level of P88.50 anytime during the next 3 months. A 3-month put option can be bought for P625 which gives the buyer the right to sell 50 shares at a price of P90 per share. What would be the net profit if you bought a 50-share contract for P625 and Blue Co.’s stock price dropped to P75?

Q: You are bullish on IT stock. The current market price is OMR70 per share, and you have OMR8,000 of…

A: Since more than one question is posted at a time the answer for first question will be provide only…

Q: is believed that RNZ Co.’s stock price is going to decline from its current level of P88.50 anytime…

A:

Q: You have borrowed $45,000 on margin to buy shares in Tencent, which is now selling at $120 per…

A: a.Calculation of Current Margin:The current margin is 42.86%.Excel Spreadsheet:

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Q: Suppose you believe that National Inc.’s stock price is going to decline from its current level of…

A: Put Option: It is the contract where a right is provided to the owner to sell a  certain amount of…

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A: a) Working note:

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A: Stop loss order means, if share price drops or reaches the stop loss level, then stop loss is…

Q: Suppose you had just gone long (purchased) on lot of Syarikat XYZ stock at a price of RM 15.00 each,…

A: Long position: Long position means we will buy stock now and sell them in future expecting the price…

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A: a) The person X might not receive a margin call. Person X hired out $20000 and with another $20000…

Q: A stock is trading at $69. You believe there is a 60% chance the price of the stock will increase by…

A: Information Provided: Stock price = $69 Cost of contract = $840

Q: Suppose that you sell short 1000 shares of Xtel, currently selling for $50 per share, and give your…

A: Short selling is the mechanism in which borrowed securities are sold with an intention of…

Q: Suppose you buy a round lot of Francesca Industries stock on 55 percent margin when the stock is…

A: Given information: Margin requirement is 55%, Purchase price of stock is R20, Annual interest rate…

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A: Concept.  Hedging long stock position. For buyer ( long position), there is profit if there is…

Q: You decide to sell short 100 shares of Github Industries  when it is selling at its yearly high $56.…

A: The conceptual formula used:

Q: You’ve borrowed $22,000 on margin to buy shares in Ixnay, which is now selling at $32 per share.…

A: Borrowed amount = $22,000 Your own equity = $22,000  Total Investment = $44,000 No. of shares bought…

Q: Momo, a fast-growing company, will make an earnings announcement three months from now. But you do…

A: Payoff of call option = max((S - X),0) Where S = stock price at expiry  X = strike price = 30 Payoff…

Q: Stanton Company stock is trading for 50 in a two‑time period environment, so that each relevant time…

A: Each resource has an inborn worth. For instance, in the event of a Rs.5 coin, the characteristic…

Q: You have borrowed $45,000 on margin to buy shares in Tencent, which is now selling at $120 per…

A: The part (b) of this question cannot be answer as the data provided is only for the shares of…

Q: What would be a simple options strategy to bet on the stock price volatility

A: The call and put options are the two main options in the stock market. A call option is one when we…

Q: You are bullish on IT stock. The current market price is OMR70 per share, and you have OMR8,000 of…

A: Current Market Price = OMR70 Own Investment = OMR8,000 Borrowed amount = OMR7,000 Interest Rate = 7%…

Q: Imagine that you are holding 5,000 shares of stock, currently selling at $40 per share. You are…

A: Note: If Initial outlay is $5,000, buy 5,000 puts and write 5,000 calls:

Q: You are selling short 1000 shares of company A, which is currently selling its shares for…

A: When shares are sold on a short sale, it means that the transaction is effected by using shares…

Q: Jenny Banks is interested in buying the stock of Fervan, Inc., which is increasing its dividends at…

A: Stock is the security which is offered to collect the funds. Stock prices fluctuate on a daily…

Q: The company offered its investors option contracts to buy their shares at P72 with the current price…

A: Call option: It is an option given to the buyer of the contract to buy the contract at a pre-decided…

Q: Mr. Wa Is believes that ABC Co.’s stock price is going to decline from its current level of P82.50…

A: Put Options gives the right but not the obligation to the seller of the option to sell a bond,…

Q: Mr. Juan Dela Cruz has a margin account with a balance of P100,000. The initial margin deposit is…

A: The margin account is the account from which the account holder can purchase the security by deposit…

Q: What should be the dividend of this “cumulative preferred” compared to the 1% of the ordinary?

A: Cumulative preferred stock implies that if there is unpaid dividend of any year and the company…

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A: A financial instrument that provides the opportunity to the buyer and seller to purchase and sell…

Q: An investor buys $ 20,000 worth of a stock priced at $ 25 per share using 80 % initial margin . The…

A: Given Information: Stocks purchased - $20,000 Stock price - $25 Initial margin - 80% Broker charges…

Q: An investor buys $10,000 worth of a stock priced at $40 per share using 70% initial margin. The…

A: Value of Purchase = $10000 Stick Price = $40 per share Number of Share =10000/40 = 250 Initial…

Q: An investor buys $10,000 worth of a stock priced at $40 per share using 70% initial margin. The…

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Q: 2The Bulldogs Inc.’s stock price is believe to decline from its current level of P125 anytime during…

A: Put option is a form of future contract which is being entered between two parties under which one…

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A: Computation:

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A: Given information: Price of share : $28 Limit : $24 Decline in price to $20 and increase to $36

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A: The correct answer for the above mentioned question is given in the following steps for your…

Q: Construct a table and a graph to show the profit/loss (P/L) from the option strategy.

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A: Put option is that option under which trader will earn the profit when the share price will decline…

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Q: You are bullish on Telecom stock. The current market price is $80 per share, and you have $12,000 of…

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A: Margin call is received when our margin percent falls below maintenance margin

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A: The put option is the option that gives the buyer the choice but not the obligation to sell the…

Q: It is believed that Blue Co.'s stock price is going to decline from its current level of P88.50…

A:

Q: The current market price for ABC is $70 per share. Initialmargin is 50%, maintenance margin is 35%…

A: Introduction: Performing trading of securities on a margin would give the investor an opportunity to…