purchase Creative Computers (CC)? The initial margin is 50% for both long and short positions. Assume that the arbitrage opportunity disappears when Ubid shares are distributed to CC shareholders. Without considering margin interests on both long and short positions‚ what should be the minimum rate of return in six months? IV. Risks in arbitrage (1 mark) What are the risks associated with the arbitrage transactions? V. Margin call (3 marks) The maintenance margin is 25% for long and 30% for short
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FIN300 Spring 2013 Midterm #1 Study Guide General instructions: 1. This is NOT a comprehensive list of topics that may be covered on your exam. All the lecture material and everything from chapters 1-9 in your textbook (with noted exceptions) is fair game. However‚ it is probably a good idea to emphasize these topics when you study for the test. 2. Understanding the concepts is a prerequisite for succeeding in this course. 3. You should practice solving problems until you feel comfortable you can
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1101/125.241 ALBANY Internal Sc CP MASSEY UNIVERSITY ALBANY CAMPUS EXAMINATION FOR 125.241 INTRODUCTION TO INVESTMENTS Semester One – 2011 Time allowed: THREE (3) hours Answer ALL questions in Sections A and B INSTRUCTIONS This is a closed book exam Section A: Answer on the Scantron Card Provided Section B: Answer in the Blue Answer Book provided. Sc: Ensure that your name and identification number are entered on your Scantron Card in the first eight spaces. Record your answer on your
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Version 1 FINANCE 261 FINANCE 261 Test Answer Sheet Name: __________________________________________ Student ID Number:_______________________________ Please use CAPITAL LETTERS when writing your answers. Question Answer Question Answer Question Answer 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Question Answer 16 17 18 19 20 1 Version 1 FINANCE 261 THE UNIVERSITY OF AUCKLAND Department of Accounting and Finance FINANCE
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Starting Date: February 2‚ 2010 Ending Date: April 28‚ 2010 Buying on Margin: A. Initial Investment = (Purchase Price* number of stocks)*Initial Margin Initial Investment = ($195.86 * 100) * .55 = $10‚772.30 B. Profit/Loss = (Sales Price – Purchase Price) * Number of Shares Profit/Loss = ($262.04 – $195.86) * 100 = $6‚618 C. HPR = (Capital Gain/loss) ÷ Initial Investment HPR = ($262.04 – $195.86) ÷ $10‚772.30 = .00614 = .614% D. APHR = (1 + HPR)N – 1 APHR = (1 + .00614)4 – 1 APHR
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The Responsibility Project ETH316 The Entrepreneurial Spirit In society today there seems to be a social stigma surrounding the idea of doing right by our bother’s and sisters. Some would call it having good or bad social responsibility. This of course it derived by an individual’s ethical point-of-view. What some would perceive as doing the right thing‚ others might feel it is not there responsibility. In the short film I chose‚ The Entrepreneurial Spirit: Austin Black‚ it talks about
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The DuPont system is a way to determine how well firm has executed its business strategy as measured by the overall return generated for its owners. There are three key ratios that are subdivided from the DuPont system: the profit margin‚ asset utilization‚ and financial leverage. From the financial reports the return on equity (annual ratio report) for 2011 was 28.409%. Compared to the industry average of 17.62% Starbucks is exceeding by over 10% which confirms that the company is doing well in
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bought the stock on margin and the margin requirement was (a) 25 percent‚ (b) 50 percent‚ and (c) 75 percent? (Ignore commissions‚ dividends‚ and interest expense.) Initial Stock price per share $10 # of Shares Purchased 100 New Stock price per share $17.50 Gain = New Price - Initial Price $750.00 = ($17.50 x 100) - ($10 x 100) Purchase Price = Initial Stock price per share x # of Shares Purchased $1‚000 FORMULA: Percentage Return = Gain (Margin Requirement x Purchase
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Payoff Long 1 share MALL $ 22.75 $ - Short 0.7159 shares of UBID $ (25.55) $ - Short Cash Proceeds* $ 25.55 $ 25.55 Long Margin Loan (cash) $ (11.38) $ (11.77) Short Margin Collateral (cash) $ 12.77 $ 13.03 Net (equity) $ 24.15 $ 26.81 11.00% <= 6m ROI Interest on short proceeds** 0.00% Margin loan interest - borrow 7.00% Margin loan interest - lend 4.00% * with broker ** rebate rate MALL-UBID arbitr 4 Technical Details Long Position Assets Liabilities
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purposes‚ day-trading is NOT allowed. - For any single security‚ the position limit is 10% of the initial cash balance. - Bonds‚ stocks‚ mutual funds‚ options‚ and futures are available for the trading. - Short-selling is allowed‚ but trading on margin is NOT allowed. - 28 financial markets are available for the trading. - For any other trading information‚ please visit the StockTrak web page. Midterm Oral Presentation: - 20-30 minutes for each group - No need to submit written report. - Date:
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