Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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9. Assume the new investor sells the 420 shares. What is his profit? What is the annualized return The fund sells 800 shares of stock 4 to raise the needed funds. Assume 250 trading days per year.
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Annualized return refers to the expected return by the investors on the investment made. It represents the amount of profit to be earned by the investors in a certain period of time.
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- Your client buys 10 shares of stock at time 0 for $43 per share. At time 1, he receives a dividend of $1 per share, and buys another 10 shares at the new price of $48 per share. At time 2, he receives a dividend of $1 per share, and sells his entire holding of stock for $51 per share. What was the client's time-weighted annual return on this position? Enter answer as a percentage, accurate to two decimal places.arrow_forwardJituarrow_forwardSuppose a hedge fund manager earns 1% per trading day. There are 250 trading days per year. Answer the following questions: a. What will be your annual return on $100 invested in her fund if they allow you to reinvest in their fund the 1% you earn each day? b. What will be your annual return assuming they put all of your daily earnings into a zero-interest- bearing checking account and pays you everything earned at the end of the year? Please answer correctly, and provide the work and a slight explanation alongside, thank you its appreciatedarrow_forward
- A stock sells for $15 per share. You purchase 100 shares for $15 a share (i.e., for $1,500), andafter a year the price rises to $18.75 a) What will be the percentage return on your investment ifyou bought the stock on margin and the margin requirement was 65 percent? (Ignore commissions, dividends, and interest expense.) b) Rather than selling for $18.75, determine the percentage return on your investment if the price of the stock falls to $12.30 Based on your answers to both questions, what generalization on the use of marginaccounts can be inferred?arrow_forwardHudson Corporation will pay a dividend of $2.20 per share next year. The company pledges to increase its dividend by 6.00 percent per year indefinitely. If you require a return of 10.80 percent on your investment, how much will you pay for the company's stock today? Multiple Choice O$45.83 O O $47.67 $12.35 $43.24arrow_forwardAssume that an investor buys 100 shares of stock at $37 per share, putting up a 65% margin. a. What is the debit balance in this transaction? b. How much equity funds must the investor provide to make this margin transaction? c. If the stock rises to $59 per share, what is the investor's new margin position? a. The debit balance in this transaction is $ *** (Round to the nearest dollar.)arrow_forward
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