Questions from General Investment

Q: What is industry analysis, and why is it important?

What is industry analysis, and why is it important?

Q: An investor short sells 100 shares of a stock for $20

An investor short sells 100 shares of a stock for $20 per share. The initial margin is 50%, and the maintenance margin is 30%. The price of the stock rises to $28 per share. What is the margin, and wi...

Q: Calculate the profit or loss per share realized on each of the

Calculate the profit or loss per share realized on each of the following short-sale transactions.

Q: Charlene Hickman expected the price of Bio International shares to drop in

Charlene Hickman expected the price of Bio International shares to drop in the near future in response to the expected failure of its new drug to pass FDA tests. As a result, she sold short 200 shares...

Q: The SP-6 Index (a fictitious index) is used

The SP-6 Index (a fictitious index) is used by many investors to monitor the general behavior of the stock market. It has a base value set equal to 100 at January 1, 1978. In the accompanying table, t...

Q: Deepa Chungi wishes to develop an average, or index, that

Deepa Chungi wishes to develop an average, or index, that can be used to measure the general behavior of stock prices over time. She has decided to include six closely followed, high-quality stocks in...

Q: Al Cromwell places a market order to buy a round lot of

Al Cromwell places a market order to buy a round lot of Thomas, Inc., common stock, which is traded on the NYSE and is currently quoted at $50 per share. Ignoring brokerage commissions, determine how...

Q: Imagine that you have placed a limit order to buy 100 shares

Imagine that you have placed a limit order to buy 100 shares of Sallisaw Tool at a price of $38, although the stock is currently selling for $41. Discuss the consequences, if any, of each of the follo...

Q: If you place a stop-loss order to sell at $

If you place a stop-loss order to sell at $23 on a stock currently selling for $26.50 per share, what is likely to be the minimum loss you will experience on 50 shares if the stock price rapidly decli...

Q: You are considering two investment alternatives. The first is a stock

You are considering two investment alternatives. The first is a stock that pays quarterly dividends of $0.25 per share and is trading at $20 per share; you expect to sell the stock in six months for $...