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Quiz 1 Solution - stock on or before a specific date at a...

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Quiz 1 FINA 469 – Spring 2012 1. An order to buy or sell a security at the current price is a _______________. A. Limit order B. Market order C. Stop loss order D. Stop buy order 2. You purchased 250 shares of common stock on margin for $25 per share. The initial margin is 50% and the stock pays no dividend. Your rate of return would be __________ if you sell the stock at $30 per share. Ignore interest on margin. A. 35% B. 39% C. 40% D. 28% 3. Purchases of new issues of stock take place __________. A. At the desk of the Fed B. In the primary market C. In the secondary market D. In the money markets 4. Ownership of a put option entitles the owner to the __________ to ___________ a specific
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Unformatted text preview: stock, on or before a specific date, at a specific price. A. right, buy B. right, sell C. obligation, buy D. obligation, sell 5. On March 31, 2009, a T-bill quote sheet has the quotes with a 4.92 bid and a 4.86 ask. If the bill has a $1,000 face value, and 90 days to maturity, how much shall an investor pay to buy this T-bill? What is the bond equivalent yield based on the asked price of this T-bill? P=1000-4.86%*(90/360)*1000=987.85 Bond Equivalent Yield=(1000-987.85)/987.85*100%*(365/90)=4.99%...
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