Questions from General Investment

Q: Preferred stock yields often are lower than yields on bonds of the

Preferred stock yields often are lower than yields on bonds of the same quality because of: a. Marketability b. Risk c. Taxation d. Call protection

Q: An analyst estimates that a stock has the following probabilities of return

An analyst estimates that a stock has the following probabilities of return depending on the state of the economy. What is the expected return of the stock?

Q: Here is some price information on Fincorp stock. Suppose first that

Here is some price information on Fincorp stock. Suppose first that Fencer trades in a dealer market a. Suppose you have submitted an order to your broker to buy at market. At what price will your tra...

Q: You’ve borrowed $20,000 on margin to buy shares in

You’ve borrowed $20,000 on margin to buy shares in Ixnay, which is now selling at $40 per share. Your account starts at the initial margin requirement of 50%. The maintenance margin is 35%. Two days l...

Q: On January 1, you sold short one round lot (i

On January 1, you sold short one round lot (i.e., 100 shares) of Snow’s stock at $21 per share. On March 1, a dividend of $3 per share was paid. On April 1, you covered the short sale by buying the st...

Q: Suppose that XTel currently is selling at $40 per share.

Suppose that XTel currently is selling at $40 per share. You buy 500 shares using $15,000 of your own money, borrowing the remainder of the purchase price from your broker. The rate on the margin loan...

Q: Suppose that you sell short 500 shares of XTel, currently selling

Suppose that you sell short 500 shares of XTel, currently selling for $40 per share, and give your broker $15,000 to establish your margin account. a. If you earn no interest on the funds in your mar...

Q: What is the difference between a primary and a secondary market?

What is the difference between a primary and a secondary market?

Q: How do security dealers earn their profits?

How do security dealers earn their profits?

Q: In what circumstances are private placements more likely to be used than

In what circumstances are private placements more likely to be used than public offerings?