You decide to sell short 200 shares of Charlotte Horse Farms when it is selling at its yearly high of $48. Your broker tells you that your margin requirement is 50 percent and that the commission on the purchase is $360. While you are short the stock, Charlotte pays a $2.90 per share dividend. At the end of one year, you buy 200 shares of Charlotte at $34 to close out your position and are charged a commission of $350 and 13 percent interest on the money borrowed. What is your rate of return on the investment? Do not round intermediate calculations. Round your answer to two decimal places. %

You decide to sell short 200 shares of Charlotte Horse Farms when it is selling at its yearly high of $48. Your broker tells you that your margin requirement is 50 percent and that the commission on the purchase is $360. While you are short the stock, Charlotte pays a $2.90 per share dividend. At the end of one year, you buy 200 shares of Charlotte at $34 to close out your position and are charged a commission of $350 and 13 percent interest on the money borrowed. What is your rate of return on the investment? Do not round intermediate calculations. Round your answer to two decimal places. %

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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You decide to sell short 100 shares of Charlotte Horse Farms when it is selling at its yearly high of $51. Your broker tells you that your margin requirement is 50 percent and that the commission on the purchase is $170. While you are short the stock, Charlotte pays a $2.35 per share dividend. At the end of one year, you buy 100 shares of Charlotte at $37 to close out your position and are charged a commission of $160 and 7 percent interest on the money borrowed. What is your rate of return on the investment? Do not round intermediate calculations. Round your answer to two decimal places.
You decide to sell short 100 shares of Charlotte Horse Farms when it is selling at its yearly high of R56. Your broker tells you that your margin requirement is 45 percent and that the commission on the purchase is R155. While you are short the stock, Charlotte pays a R2.50 per share dividend. At the end of one year, you buy 100 shares of Charlotte at R45 to close out your position and are charged a commission of R145 and 8 percent interest on the money borrowed. What is your rate of return on the investment?
You decide to sell short 100 shares of Charlotte Horse Farms when it is sell at its yearly high of R56. Your broker tells you that your margin requirement is 45 percent and that the commission on the purchase is R155. While you are short the stock, Charlotte pays a R2.50 per share dividend. At the end of one year, you buy 100 shares of Charlotte at R45 to close out your position and are charged a commission of R145 and 8 percent interest on the money borrowed. What is your rate of return on the investment?
You decide to sell short 100 shares of Github Industries when it is selling at its yearly high $56. Your broker tells you that your margin requirement is 45 % and that the commision on the purchase is $155. While you are short the stock, Github pays a $2.50 per share dividend. At the end of one year, you buy 100 shares of Github at $45 to close out your position and are charged a commision of $145 and 8 % interest on the money borrowed. What is your rate of return on the investment?
4. You decide to sell 100 shares of Topgun Enterprises Inc. short when it is selling at its yearly high of $42.25. Your broker tells you that your margin requirement is 60 percent and that the commission on the sale is $20. While you are short, Topgun pays a $0.85 per share dividend. At the end of one year you buy your Topgun shares (cover your short sale) at $44 and are charged a commission of $20 and a 5 percent interest rate. a. What is your dollar return on the investment? b. What is your rate of return on the investment?
Stella plans to purchase 100 shares of a stock (ticker: HOOD) that is currentlytrading at $72 per share. She plans to get a call loan of $4,000 from her long-time broker. Herbroker will charge 2.74% interest on the loan regardless of the length of the loan. If the stockincreases by $10 over the next year, what is the return on her investment for the year?Assume she pays the interest when she returns the loan. Round your answer to two decimalplaces. Use a detailed explanation without excel. A. 13.89%B. 14.67%C. 16.67%D. 27.83%E. 31.25%
Lauren short sells 100 shares of XYZ at $52 with a 50% initial margin. She then bays back the stock for $48. If her broker charges 2% of the borrowed amount, what is her percentage profit or loss?
Barbara Simmions purchase 100 shares of Home Depot stock for $183.07 per share,using as little of her own money as she could.her broker has a 60% intial margin requirement and a 38% maintenance margin requirement.if the lrice of home depot stock falls to $137.37 per share.what does barbara need to do?
Jessie B. purchases 450 shares of Smooth Sail Inc. for $50 per share at a time when the initial margin requirement is 60%. After two months, seeing that the price of Smooth Sail has fallen to $40 per share, Jessie wishes to buy an additional 200 shares. By this time, the initial margin requirement has gonedown to 50%. Will Jessie be able to do some pyramiding? What is the amount of margin he will be required to provide for his second transaction? Answer the question showing calculations.
a) Jessie B. purchases 450 shares of Smooth Sail Inc. for $50 per share at a time when the initial marginrequirement is 60%. After two months, seeing that the price of Smooth Sail has fallen to $40 per share,Jessie wishes to buy an additional 200 shares. By this time, the initial margin requirement has gonedown to 50%. Will Jessie be able to do some pyramiding? What is the amount of margin he will berequired to provide for his second transaction? Support your answer with relevant calculations.
Jessie B. purchases 450 shares of Smooth Sail Inc. for $50 per share at a time when the initial margin requirement is 60%. After two months, seeing that the price of Smooth Sail has fallen to $40 per share, Jessie wishes to buy an additional 200 shares. By this time, the initial margin requirement has gone down to 50%. Will Jessie be able to do some pyramiding? What is the amount of margin he will be required to provide for his second transaction? Support answer with relevant calculations.
Sam bought through her broker 200 Apex Mining common stock at $61.50/share. The broker charged her 2% commission. One year later she sold the shares for $71.25. What is total cost of buying the stock?

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