BU111 Spring 2012 - Supplementary Questions

Therefore they are able to enter into a larger

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Unformatted text preview: o 50% of the current market value of the shares. Therefore, they are able to enter into a larger transaction then they would be able to with a straight market order, and have the potential to earn a larger return. Problem 4 a) Stock HAR b) Stock RON Raising Marks. Raising Money. Raising Roofs. www.schoolsos.com Students Offering Support: Wilfrid Laurier University c) Stock HRM Problem 5 a) What is your capital gain or loss? ( ) b) If the price decreased to $15 before you sold your shares, what would be the amount of the margin call? ( ) Problem 6 ( ) Raising Marks. Raising Money. Raising Roofs. www.schoolsos.com Students Offering Support: Wilfrid Laurier University Problem 7 [ ( ( ) ) Note that the bond is priced at a premium (price is higher than face value) since the coupon rate is higher than market interest rate Problem 8 a) For bonds sold at premium: Market Rate < Coupon Rate b) For bonds sold at par: Market Rate = Coupon Rate c) For bonds sold at discount: Market Rate > Coupon Rate Problem 9 ( ( ( ) ) ) ( ) ( [ )] ( ) ) ) ( ( 2 39 Your sleazy cous...
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