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 340 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
Thanks for the timely response, appreciate it

softEldritch

  • Member
  • Posts: 334
Reply 3 on: Yesterday
Excellent

« previous next »
 

Did you know?

Tobacco depletes the body of vitamins A, C, and E, which can result in any of the following: dry hair, dry skin, dry eyes, poor growth, night blindness, abscesses, insomnia, fatigue, reproductive system problems, sinusitis, pneumonia, frequent respiratory problems, skin disorders, weight loss, rickets, osteomalacia, nervousness, muscle spasms, leg cramps, extremity numbness, bone malformations, decayed teeth, difficulty in walking, irritability, restlessness, profuse sweating, increased uric acid (gout), joint damage, damaged red blood cells, destruction of nerves, infertility, miscarriage, and many types of cancer.

Did you know?

It is believed that humans initially contracted crabs from gorillas about 3 million years ago from either sleeping in gorilla nests or eating the apes.

Did you know?

Anti-aging claims should not ever be believed. There is no supplement, medication, or any other substance that has been proven to slow or stop the aging process.

Did you know?

A seasonal flu vaccine is the best way to reduce the chances you will get seasonal influenza and spread it to others.

Did you know?

Drying your hands with a paper towel will reduce the bacterial count on your hands by 45–60%.

The characteristically small and relatively short-legged reindeer from Svalbard The characteristically small and relatively short-legged reindeer from Svalbard
Selling Today: Partnering to Create Value (Manning/Ahearne/Reece) Selling Today: Partnering to Create Value (Manning/Ahearne/Reece)
Oceanic-Continental Convergence Oceanic-Continental Convergence
How to calculate invest at each rate How to calculate invest at each rate
Data management short answer q Data management short answer q
Short form of amino acids Short form of amino acids
Video: Optic Nerve and Optic Disk Animation (Part 1 of 2)

For a complete list of videos, visit our video library