Questions from General Investment

Q: In Problem 14, suppose JC Penney stock sells for $8

In Problem 14, suppose JC Penney stock sells for $8 per share immediately before your options’ expiration. What is the rate of return on your investment? What is your rate of return if the stock sells...

Q: You’ve located the following option quote for Eric-Cartman, Inc

You’ve located the following option quote for Eric-Cartman, Inc. (ECI): Two of the premiums shown can’t possibly be correct. Which two? Why?

Q: Suppose you have $28,000 to invest. You’re considering

Suppose you have $28,000 to invest. You’re considering Miller-Moore Equine Enterprises (MMEE), which is currently selling for $40 per share. You also notice that a call option with a $40 strike price...

Q: How will personal tax rates impact the choice of a traditional versus

How will personal tax rates impact the choice of a traditional versus a Roth IRA?

Q: In Problem 18, suppose a dividend of $0.80

In Problem 18, suppose a dividend of $0.80 per share is paid. Comment on how the returns would be affected. Data from Problem 18: Suppose you have $28,000 to invest. You’re considering Miller-Moore...

Q: In Problem 18, suppose a put option with a $40

In Problem 18, suppose a put option with a $40 strike is also available with a premium of $2.80. Calculate your percentage return for the six-month holding period if the stock price declines to $36 pe...

Q: A sector fund specializing in commercial bank stocks had average daily assets

A sector fund specializing in commercial bank stocks had average daily assets of $3.4 billion during the year. This fund sold $1.25 billion worth of stock during the year, and its turnover ratio was 0...

Q: You purchased 2,000 shares in the New Pacific Growth Fund

You purchased 2,000 shares in the New Pacific Growth Fund on January 2, 2016, at an offering price of $47.10 per share. The front-end load for this fund is 5 percent, and the back-end load for redempt...

Q: You invested $1,250,000 with a market-

You invested $1,250,000 with a market-neutral hedge fund manager. The fee structure is 2/20, and the fund has a high-water-mark provision. Suppose the first year the fund manager loses 10 percent and...

Q: Suppose the following three defense stocks are to be combined into a

Suppose the following three defense stocks are to be combined into a stock index in January 2016 (perhaps a portfolio manager believes these stocks are an appropriate benchmark for his or her performa...