Questions from General Investment

Q: Calculate the index return for the information in Problem 4 using a

Calculate the index return for the information in Problem 4 using a value-weighted index.

Q: Using the information from Problem 5, calculate the variances and the

Using the information from Problem 5, calculate the variances and the standard deviations for Cherry and Straw.

Q: You purchase 10 call option contracts with a strike price of $

You purchase 10 call option contracts with a strike price of $75 and a premium of $3.85. If the stock price at expiration is $82, what is your dollar profit? What if the stock price is $72?

Q: Suppose you calculated the total market value of the stocks in an

Suppose you calculated the total market value of the stocks in an index over a five-year period: Year 1: 4,387 million Year 2: 4,671 million Year 3: 5,032 million Year 4: 4,820 million Year 5: 5,369 m...

Q: On November 14, Thoro good Enterprises announced that the public and

On November 14, Thoro good Enterprises announced that the public and acrimonious battle with its current CEO had been resolved. Under the terms of the deal, the CEO would step down from his position i...

Q: The following diagram shows the cumulative abnormal returns (CAR) for

The following diagram shows the cumulative abnormal returns (CAR) for oil exploration companies announcing oil discoveries over a 30-year period. Month 0 in the diagram is the announcement month. Assu...

Q: The following figures present the results of four cumulative abnormal returns (

The following figures present the results of four cumulative abnormal returns (CAR) studies. Indicate whether the results of each study support, reject, or are inconclusive about the semi strong form...

Q: An important difference between a long position in stock and a short

An important difference between a long position in stock and a short position concerns the potential gains and losses. Suppose a stock sells for $18 per share and you buy 500 shares. What are your pot...

Q: A study analyzed the behavior of the stock prices of firms that

A study analyzed the behavior of the stock prices of firms that had lost antitrust cases. Included in the diagram are all firms that lost the initial court decision, even if the decision was later ove...

Q: Calculate the standard deviations for Roll and Ross by filling in the

Calculate the standard deviations for Roll and Ross by filling in the following table (verify your answer using returns expressed in percentages as well as decimals): Data for Question 5: