If an investor makes an investment in a way so that if the price of the...
If an investor makes an investment in a way so that if the price of the asset falls, he makes profits, one says that he has taken a ________ position on that asset.
Homework Answers
Short position
It is the process of selling a particular stock and then buying back the same stock. The difference between the sale price and the buy price makes profit for an investor.
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If an investor makes an investment in a way so that if the price
of the...
If an investor makes an investment in a way so that if the price of the...
If an investor makes an investment in a way so that if the price of the asset rises, he makes profits, one says that he has taken a ________ position on that asset.
A U.S. investor makes an investment in Britain and earns 14% on the investment while the...
A U.S. investor makes an investment in Britain and earns 14% on the investment while the British pound depreciates against the U.S. dollar by 8%. What is the investor's total return? 22.00% 23.12% 6.00% 4.88% none of the above is correct
A stock price is $25. An investor buys one put option contract on the stock with...
A stock price is $25. An investor buys one put option contract on the stock with a strike price of $24 and sells a put option contract on the stock with a strike price of $22.50. The market prices of the options are $2.12 and$1.95, respectively. The options have the same maturity date. Describe the investor's position and the possible gain/loss he will get (taking into account the initial investment).
Part2 Option No. 2-Investor Capital Semih has found an investor who is willing to provide him...
Part2 Option No. 2-Investor Capital Semih has found an investor who is willing to provide him with 500,000 TL in exchange for 30% ownership, which means he will take 30% of the annual profits. The investor generally seeks a 12% ROI for his investments. Let's say Semih anticipates that he will have future profits of 200,000 TL peryear for the forseeable future. What is the Present Value of the investment for the investor? Based on the investment amount, what is...
A bank offers an investment opportunity that makes payments to the investor of $800 per quarter...
A bank offers an investment opportunity that makes payments to the investor of $800 per quarter forever. If they quote an APR of 26.0%, then what is the most you should be willing to pay for the investment today? (What numbers do I put into the financial calculator for N, I/Y, PV, PMT and FV?
5. (a) Explain the differences between a forward contract and an option. [2] (b) An investor...
5. (a) Explain the differences between a forward contract and an option. [2] (b) An investor has taken a short position in a forward contract. If Sy is the price of the underlying stock at maturity and K is the strike, what is the payoff for the investor? Does the investor expect the underlying stock price to increase or decrease? Explain your answer. (2) (c) (i) An investor has just taken a short position in a 6-month forward contract on...
An investor, sold 400 shares short of XYZl, Inc. at $42 a share. The price of...
An investor, sold 400 shares short of XYZl, Inc. at $42 a share. The price of the stock subsequently fell to $38 before rising to $50 at which time investor covered the position (that is, closed the short position). What was the percentage gain or loss on this investment?
QUESTION 41 Which of the following incorrectly describes short selling? a. Short selling profits the investor who create...
QUESTION 41 Which of the following incorrectly describes short selling? a. Short selling profits the investor who created the position if the price of the asset increases b. Interest and dividends from the asset borrowed are given to the lender. c. Short sales happen when investors short assets, or contract, that they do not own.
5. Risk aversion Erik is an investor with $5,000 available for investment. He has the folllowing three investment possi...
5. Risk aversion Erik is an investor with $5,000 available for investment. He has the folllowing three investment possibilities from which to choose: Option Scenarios Keep the $5,000 in cash for one year 1 2 Invest in a friend's business with a 50% chance of getting $10,000 after one year and a 50% chance of getting nothing Invest in a relative's business with a 3 30% chance of getting $15,000 after one year, 20% chance of getting $2,500 after one...
4. Risk aversion Erik is an investor with $5,000 available for investment. He has the following...
4. Risk aversion Erik is an investor with $5,000 available for investment. He has the following three investment possibilities from which to choose: Option Scenarios Keep the $5,000 in cash for one year. Invest in a friend's business with a 50% chance of getting $10,000 after one year and a 50% chance of getting nothing. Invest in a relative's business with a 30% chance of getting $15,000 after one year, 20% chance of getting $2,500 after one year, 50% chance...
Part2 Option No. 2-Investor Capital Semih has found an investor who is willing to provide him with 500,000 TL in exchange for 30% ownership, which means he will take 30% of the annual profits. The investor generally seeks a 12% ROI for his investments. Let's say Semih anticipates that he will have future profits of 200,000 TL peryear for the forseeable future. What is the Present Value of the investment for the investor? Based on the investment amount, what is...
5. (a) Explain the differences between a forward contract and an option. [2] (b) An investor has taken a short position in a forward contract. If Sy is the price of the underlying stock at maturity and K is the strike, what is the payoff for the investor? Does the investor expect the underlying stock price to increase or decrease? Explain your answer. (2) (c) (i) An investor has just taken a short position in a 6-month forward contract on...
5. Risk aversion Erik is an investor with $5,000 available for investment. He has the folllowing three investment possibilities from which to choose: Option Scenarios Keep the $5,000 in cash for one year 1 2 Invest in a friend's business with a 50% chance of getting $10,000 after one year and a 50% chance of getting nothing Invest in a relative's business with a 3 30% chance of getting $15,000 after one year, 20% chance of getting $2,500 after one...
4. Risk aversion Erik is an investor with $5,000 available for investment. He has the following three investment possibilities from which to choose: Option Scenarios Keep the $5,000 in cash for one year. Invest in a friend's business with a 50% chance of getting $10,000 after one year and a 50% chance of getting nothing. Invest in a relative's business with a 30% chance of getting $15,000 after one year, 20% chance of getting $2,500 after one year, 50% chance...
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