2. Suppose you buy shares of a stock worth OMR20000 and the initial margin is 50% and the maintenance margin is 30%. A. How much money must you pay the broker for the shares? How much have you borrowed from the broker? B. Suppose the price of the stock falls so that the shares are only worth OMR10000. What would be your new account equity? C. How much money you need to give the broker to meet the maintenance margin?

Q: 3. Current price of stock is $20 and expected price after one year is 22.5. If investor required…

A: Dividend means the part of profits distributed by the company to its shareholders. As per Dividend…

Q: Shares in OKComputer currently trade at $63.41. Your broker allows you to short sell the shares with…

A: Initia Margin is the amount trader needs to deposit with broker for trading securities Maintenance…

Q: Suppose you think that the market price of a share of Facebook will increase in the next few month…

A: The margin account refers to the account where the account holder pays a particular percentage of…

Q: You buy a stock at $100 and sell it for $140;what is the percentage return if the margin requirement…

A: given, purchase price = $100 selling price = $140 margin required = 40% interest= 10%

Q: 6. An investor buys $16,000 worth of a stock priced at $20 per share using 60% initial margin and…

A: Investment in the stock $16,000Current price of the stock $20The initial margin is 60%Maintenance…

Q: You are considering buying a stock that will pay a dividend of $2.3 next year. The dividend is…

A: To calculate the stock price we will use the following formula   Stock price = D1/(R-G) Where D1-…

Q: Suppose you valued a firm and came up with the value of equity of 9.50. The probability of financial…

A: The value of a share is the current market price of a stock of a company. It is calculated as the…

Q: Suppose you decide that the Bear Company stock is selling at too high a price at its current $50 per…

A: Total Profit/loss is amount of gain/loss per share multiplied with number of shares

Q: You just purchased a share of Northstar Sports for $100.00. You expect to receive a dividend of…

A: Return earned on stock has two components. One is dividend to be received and other is capital gain…

Q: Suppose you purchased a stock a year ago. Today, you receive a dividend of $16 and you sell the…

A: To calculate the purchase price of stock we will solve the following equation   Rate of return =…

Q: You deposited P100,000 cash in brokerage account and short sell P200,000 of stocks on margin. Later…

A: It is the difference between the total value of securities held in an investor's account and the…

Q: You have purchased stock A when it is $4 and sold it at $5. What is your holding period return?

A: Purchase price = $ 4 Sale price = $ 5

Q: Assume you buy 100 shares of stock at Php40 per share on margin (40 percent). If the price rises to…

A: We need to compute percentage return due to price rise or fall.

Q: am. 114.

A: The expected return of the investment can be calculated using the formula for leveraged returns,…

Q: ares of a fictional company called Harasser Flasher Inc. at $20. The share subsequently drops at…

A: When you short sell your position than you will get profit if the prices fall down.

Q: $200 with which you can buy shares of stock from two companies: ABC Hot Chocolate Company and XYZ…

A: Expected gain per share = Sum of (Expected % of particular weather * Expected rise in Share during…

Q: You are bullish on Telecom stock. The current market price is $50 per share, and you have $5,000 of…

A: Margin Call: It is the demand for additional securities or capital for bringing up the margin…

Q: . Assume that you bought a Treasury bill at price=92.450 and sold two days later at 92.550.   What…

A: Holding period return is the total return received from holding an asset or portfolio of assets over…

Q: What is the percentage margin of a margin call if an investor has purchased $10,000 worth of…

A: A margin money under margin call is an important concept in capital market or stock market trading.…

Q: You’ve borrowed $20,000 on margin to buy shares in Ixnay, which is now selling at $40 per share.…

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

Q: A stock that currently sells for $150 has a required return of 11.45% and dividend yield of 3%. What…

A: Select financials about a stock are available. We have to find the expected dividend from the stock.

Q: 4. Steve has received a stock tip from Monica. Monica has told him that XYZ Corp. will increase in…

A: Expected utility means expected value which can investor earns by investing his money. Expected…

Q: 3. Suppose you want short 100 shares of Apple, at $ 30 per share with the initial margin 50% and the…

A: Equity consists of money which would be decided to return to a corporate debtor if all of its assets…

Q: of a derivative that pays off $100 after one year if a company has defaulted during the year is $5.…

A: Probabilities of hypothetical future events that were adjusted for risk are known as risk-neutral…

Q: margin

A: Equity = market value - margin - broker charges

Q: 6. Assume you own Apple stock. The current price is $100. Assume a strike of $110 and expiration of…

A: A covered call strategy involves the use of call options to generate some income in the form of a…

Q: Suppose that Brue currently is selling at $50 per share. You buy 900 shares using $36,000 of your…

A: Shares -Units that indicate ownership in a firm are called shares, stocks, or equities. Considered…

Q: You are about to purchase OSTK, which is currently trading at $20 per share.  You have $5,000 of…

A: The maintenance margin is the margin below which we will get a margin call. A margin call is a…

Q: Suppose you have $1 short $5000 worth of Kinston stock and invest the proceeds from your short sale,…

A: Solution:- Return of the portfolio means the return earned on the total money invested. So, return…

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: 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: Suppose that you believe the fundamental value of Wal-Grey stock is about to rise from $50 to $100…

A: The profit realized from simple stock investment is only restricted to the rise in stock price. In…

Portfolio Management

Portfolio management is the process by which an investor decides that how the person will invest in a variety of assets in order to get a desired return in the future. A portfolio means a pool of assets that includes securities, bonds, and other investment instruments which helps in risk minimization of the money that has been invested. In other words, it can be said that a portfolio means a combination of assets in which an investor decides to invest their money in order to get a lump sum return in the future or even a series of cash flow that the person is expecting at the end of their job life.