This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: You have $10,000 to invest and you are considering short selling shares of Oceanic Airlines or ... (Read 238 times)

a0266361136

  • Hero Member
  • *****
  • Posts: 538
on: Apr 25, 2021
You have $10,000 to invest and you are considering short selling shares of Oceanic Airlines or purchasing 10 put options on the shares. The stock price is currently $100. If you short sell, then your broker requires you to deposit 50% margin into your brokerage account. So, you can afford to short sell 200 shares of Oceanic. The proceeds will be deposited in your account and you will have to deposit an additional $10,000 of margin. The put option expires in six months, has a strike price of $100 and has a premium of $10 (per share). Assume that the stock price falls to $75 by the option expiry date. What is the ratio of the rate of return on the puts over the return on the short sale? In the case of the short sale, treat your margin deposit as your investment.
◦ -10.00
◦ 1.00
◦ 3.00
◦ 5.00
Corporate Finance Online ¦ Eakins, McNally ¦ 2nd Edition
Buy Test-Bank


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a0266361136 on Apr 25, 2021

Swizqar

  • Sr. Member
  • ****
  • Posts: 357
Reply #1 on: Apr 25, 2021
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
Answer Preview
Only 55% of students answer this correctly


a0266361136

  • Member
  • Posts: 538
Reply 2 on: Apr 25, 2021
Great answer, keep it coming :)

amcvicar

  • Member
  • Posts: 341
Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

« previous next »
 

Did you know?

Coca-Cola originally used coca leaves and caffeine from the African kola nut. It was advertised as a therapeutic agent and "pickerupper." Eventually, its formulation was changed, and the coca leaves were removed because of the effects of regulation on cocaine-related products.

Did you know?

Hypertension is a silent killer because it is deadly and has no significant early symptoms. The danger from hypertension is the extra load on the heart, which can lead to hypertensive heart disease and kidney damage. This occurs without any major symptoms until the high blood pressure becomes extreme. Regular blood pressure checks are an important method of catching hypertension before it can kill you.

Did you know?

Autoimmune diseases occur when the immune system destroys its own healthy tissues. When this occurs, white blood cells cannot distinguish between pathogens and normal cells.

Did you know?

Cyanide works by making the human body unable to use oxygen.

Did you know?

Nitroglycerin is used to alleviate various heart-related conditions, and it is also the chief component of dynamite (but mixed in a solid clay base to stabilize it).

Cellular changes associated with short-term and long-term memory in the sea slug. Cellular changes associated with short-term and long-term memory in the sea slug.
To measure fuel-injector resistance, a technician constructed a short wiring harness with a double ... To measure fuel-injector resistance, a technician constructed a short wiring harness with a double ...
Oceanic Deposits Oceanic Deposits
Data management short answer q Data management short answer q
Experiments showing that long- or short-day plants flower in response to night length. Each horizont Experiments showing that long- or short-day plants flower in response to night length. Each horizont
Short form of amino acids Short form of amino acids
Video: Introduction to Genetics

For a complete list of videos, visit our video library