Having heard about IPO underpricing, I put in an order to my broker for 1,000 shares of every IPO he can get for me. After 3 months,my investment record is as follows:IPOABCDSharesAllocatedto Me5002001,0000Average underpricingPrice perShare$1020812a. What is the average underpricing in dollars of this sample of IPOs? (Do not round intermediate calculations. Round your answer to2 decimal places.)Average initial returnInitialReturn7%12223b. What is the average initial return on my "portfolio" of shares purchased from the four IPOs that I bid on? When calculating thisaverage initial return, remember to weight by the amount of money invested in each issue. (Do not round intermediate calculations.Enter your answer as a percent rounded to 1 decimal place.)%

The "initial return" means the profit or return that investors might expect to get soon after taking…

Having heard about IPO underpricing, I put in an order to my broker for 1,000 shares of every IPO he can get for me. After 3 months, ny investment record is as follows: IPO A B C D Shares Allocated to Me 500 200 1,000 Average underpricing Price per Share $10 20 8 12 Average initial return . What is the average underpricing in dollars of this sample of IPOs? (Do not round intermediate calculations. Round your answer to e decimal places.) Initial Return 7% 12 - 2 23 . What is the average initial return on my "portfolio" of shares purchased from the four IPOs that I bid on? When calculating this verage initial return, remember to weight by the amount of money invested in each issue. (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.) %

Having heard about IPO underpricing, I put in an order to my broker for 1,000 shares of every IPO he can get for me. After 3 months, ny investment record is as follows: IPO A B C D Shares Allocated to Me 500 200 1,000 Average underpricing Price per Share $10 20 8 12 Average initial return . What is the average underpricing in dollars of this sample of IPOs? (Do not round intermediate calculations. Round your answer to e decimal places.) Initial Return 7% 12 - 2 23 . What is the average initial return on my "portfolio" of shares purchased from the four IPOs that I bid on? When calculating this verage initial return, remember to weight by the amount of money invested in each issue. (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.) %

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

Having heard about IPO underpricing, I put in an order to my broker for 1, 120 shares of every IPO he can get for me. After 3 months, my investment record is as follows: IPO Shares Allocated to Me Price per Share Initial Return A 620 $ 10 6 % В 320 20 14 C 1, 1208-3D0 12 23 a. What is the average underpricing in dollars of this sample of IPOs? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What is the average initial return on my "portfolio" of shares purchased from the four IPOs that I bid on? When calculating this average initial return, remember to weight by the amount of money invested in each issue.
Having heard about IPO underpricing, I put in an order to my broker for 1,000 shares of every IPO he can get for me. After 3 months, my investment record is as follows: IPO A B С Shares Allocated to Me 580 200 1,000 Price per Share $10 20 8 12 Initial Return 7% 12 - 2 23 a. What is the average underpricing in dollars of this sample of IPOs? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Average underpricing 0.10
Having heard about IPO underpricing, I put in an order to my broker for 1,110 shares of every IPO he can get for me. After 3 months, my investment record is as follows: IPO Shares Allocatedto Me Price per Share Initial Return A 610 $ 12 7 % B 310 20 13 C 1,110 10 − 2 D 0 14 20 a. What is the average underpricing in dollars of this sample of IPOs? (Do not round intermediate calculations. Round your answer to 2 decimal places.) b. What is the average initial return on my “portfolio” of shares purchased from the four IPOs that I bid on? When calculating this average initial return, remember to weight by the amount of money invested in each issue. (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.)
In you cash account, you buy 100 shares of XYZ Corporation at a price of $10 per share. Two months later, XYZ pays a dividend $0.21 per share. You sell all 100 shares of XYZ three months later at a price of $12 per share. If you wanted to lever up the returns of this trade, you could have executed it in your _____ account. A) cash B) margin C) brokerage D) bank If you borrowed 50% of the upfront investment amount, your return (in percent terms) would have been _____. A) 11.10 B) 22.10 C) 44.20
In you cash account, you buy 100 shares of XYZ Corporation at a price of $10 per share. Two months later, XYZ pays a dividend $0.21 per share. You sell all 100 shares of XYZ three months later at a price of $12 per share. If you wanted to lever up the returns of this trade, you could have executed it in your _____ account. A) cash B) margin C) brokerage D) bank
You have an arrangement with your broker to request 1,050 shares of all available IPOs. Suppose that 8% of the time, the IPO is "very successful" and appreciates by 111% on the first day, 80% of the time it is "successful" and appreciates by 13%, and 12% of the time it "fails" and falls by 13%. a). By what amount does the average IPO appreciate the first day? b). Suppose you expect to receive 55 shares when the IPO is very successful, 240 shares when it is successful, and 1,050 shares when it fails. Assume the average IPO price is $12. What is your expected return on your IPO investments?
7. You invest $7,873 in stock and receive $102, $123, $121, and $155 in dividends over the following 4 years. At the end of the 4 years, you sell the stock for $11,900. What was the IRR on this investment? Review Only Click the icon to see the Worked Solution (Calculator Use). Click the icon to see the Worked Solution (Spreadsheet Use). The IRR on this investment is %. (Round to the nearest whole percent.)
You've borrowed $27,392 on margin to buy shares in bxnay, which is now selling at $42.8 per share. You invest 1280 shares. Your account starts at the initial margin requirement of 50% The maintenance margin is 35%. Two days later, the stock price changes to $49 per share. a. Will you receive a margin call? O Yes ONo b. At what price will you receive a margin cal? (Round your answer to 2 decimel pleces.)
You purchase 460 shares of stock at $37.60 per share. Several months later you sell the shares at $33.10. Your broker charges 2% commission on round lots and 3% on odd lots. Calculate the gain or loss (in $) on the transaction. Enter a number. Need Help? Read It Watch It Master It
A customer bought 500 Boeing shares at $30 a piece with 50% initial margin and 35% maintenance margin. The stock price declined to $14. What is the actual margin now? If he receives a margin call, how much money the customer would’ve needed to deposit to avoid forced sell? Answer step by step. Do all calculation. Answer must be correct. Use word file for answer
Assume you purchased 500 shares of XYZ common stock on margin at $29 per share from your broker. A. Find the following (note: fill in the blanks with values rounded to the nearest cent, no dollar signs "$", and commas "". Example: $1,234.567 >>> write as 1234.57) If the initial margin is 57%, the amount you borrowed from the broker is $ and your equity is $ B. What is the new margin if the price of share falls to $31? (note: fill in the blank with rounded % as follows: example 34.567% >>> write as 34.57%)
Old Economy Traders opened an account to short-sell 1,000 shares of Internet Dreams at $40 per share. The initial margin requirement was 50%. (The margin account pays no interest.) A year later, the price of Internet Dreams has risen from $40 to $50, and the stock has paid a dividend of $2 per share. Required: a. What is the remaining margin in the account in dollars? b-1. What is the margin percentage on the short position? b-2. If the maintenance margin requirement is 30%, will Old Economy receive a margin call?multiple choice Yes No c. What is the rate of return on the investment? (Negative value should be indicated by a minus sign.)

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