MA373 S10 Quiz 6-2

MA373 S10 Quiz 6-2 - List the four uses of derivatives 4...

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QUIZ 6 Math 373 Spring 2010 1. Circle any of the following that are NOT a derivative: An automobile insurance policy IBM stock The right to sell corn in six months for a price of $7 per bushel A United States Treasury Bond
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2. Jordan short sells Hardwick Inc stock. The bid price for the stock was 50 and the ask price for the stock was 50.50. Jordan pays a commission which is 0.7%. The collateral is 100% of the cash collected after the commission. Determine the amount of collateral.
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Unformatted text preview: List the four uses of derivatives. 4. Zhou LTD stock has a bid price of 27.00 and an ask price of 27.5. Sheely Stockbrokers charges a flat commission of $50 for each stock transaction without regard to the number of shares purchased. Baig Brokers charges a commission of 0.3% of the total stock price. You are going to buy the stock of Zhou LTD. How many shares of stock would you need to buy in order to be better off buying through Sheely Stockbrokers instead of Baig Brokers?...
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