48% Chapter 3 15. Dée Trader opens a brokerage account and purchases 300 shares of Internet Dreams at $40 per share. She borrows $4‚000 from her broker to help pay for the purchase. The interest rate on the loan is 8%. (LO 3-4) a. What is the margin in Dée’s account when she first purchases the stock? b. If the
Premium Short Margin Investment
Introduction Strategic Capital Management‚ LLC is a hedge fund planning to make financial investments in Creative Computers and Ubid. Creative Computers sold approximately 20% of its Internet auction subsidiary‚ Ubid‚ to the public at $15 per share. Ubid’s stock price closed the first day of trading at $48‚ giving Ubid a $439 million market capitalization. On dec 9‚ Creative Computers had a market capitalization of $ 232 million (22.75 * 10‚238‚703 outstanding shares) whereas Ubid’s market capitalization
Premium Short Futures contract Stock market
margin free market Margin Free Market ® Margin Free Market is a chain of Super Markets in the South of India. Margin Free outlets are typical discount stores‚ offering one-stop-shop convenience and self-service facility at a significantly discounted rate to its customers. ------------------------------------------------- Mr. N.Ravikumar.. ------------------------------------------------- Then a radio mechanic‚ ------------------------------------------------- now a 700 crore retailer.
Premium Supermarket Grocery store Wal-Mart
8 Return on Equity 5. Trend Analysis (ii) 9 Net income 2005-2008 6. Trend Analysis (iii) 10 Financial Leverage 2005-2008 7. Trend Analysis (iv) 11 Return On Assets 8. Conclusions 12 Sources of declining Performance 1. Declining ‘Net margin ’ (slides 4 & 9) 2. Declining financial leverage (impaired ability to enhance profits) 2. Aggresive U.S expansion 3. Competition from above and below‚ (changing market) Are these problems a result of the recession? -competitors not following
Premium Financial ratios Revenue Generally Accepted Accounting Principles
bid and ask is called the spread. Since all transactions are between sellers and dealers or buyers and dealers‚ the prices are set by the dealers. Active stocks will have more dealers. To compete for business‚ dealers will decrease the profit margin and therefore quote smaller (tighter) spreads. Spreads will be larger for inactively traded stocks and smaller on actively traded stocks. 3. Suppose you short sell 100 shares of IBM‚ now selling at $120 per share. (a) What is your maximum possible
Premium Short Margin Futures contract
Homework 1 DC51 Yifei Wu UID：112583057 4. Although we stated that real assets comprise the true productive capacity of an economy‚ it is hard to conceive of a modern economy without well-developed financial markets and security types. How would the productive capacity of the U.S. economy be affected if there were no markets in which one could trade financial assets? Answer a. In a capitalist system‚ financial markets play a central role in the allocation of capital resources. The best
Premium Short Margin Futures contract
EC3314 – Financial Economics Fall 2013 Vinay P NUNDLALL Problem Set 1 Question 1 Explain what is meant by the following: a. A broker holding securities in street name A brokerage account where the customer’s securities and assets are held under the name of the brokerage firm‚ rather than the name of the individual who purchased the security or asset. Although the name on the certificate is not that of the individual‚ they are still listed as the real and beneficial owner and have the rights
Premium Short Margin Leverage
SG-INVESTMENTS At least 50 percent of exam-1 Will come from this study guide Chapters 1-4 Student: ___________________________________________________________________________ 1. The largest one-day percentage decline in the Dow-Jones Industrial Average during the period 1926-2006 occurred on: A. October 19‚ 1987. B. October 28‚ 1929. C. September 17‚ 2001. D. November 6‚ 1929. E. July 19‚ 2002. 2. Based on the period 1926-2006‚ the risk premium for U.S. Treasury bills was: A. 0.0
Premium Short Investment Mutual fund
24/02/2013 1 25721 INVESTMENT MANAGEMENT Lecturers: Sean Anthonisz Nadima El-Hassan Jianxin Wang Brandon Zhu Subject Coordinator: Jianxin Wang Objectives 2 Why do you take this subject? What do you expect to learn? How much did you pay for this subject? Is this a good investment? Investment Decisions 3 How much should I invest in risky assets? How much should I invest in different risky assets? How many risky assets should I hold? When not to diversify? How to determine
Premium Financial markets Short Futures contract
Wal-Mart. When we take apart the ROE number into its parts we can see a really high leverage from Sears. Wal-Mart with just a few points below the ROE from Sears when analyzed seems more solid and stable. Lets remember that ROE comes from the profit margin‚ asset turn over and financial leverage. The combination of the performance of this 3 determines the ROE for the company. Now keeping this in mind we have Wal-Mart who accounts with a high turn over assets with 5.4 for 1997 and 2.8 for 1998‚ while
Premium Financial ratios Inventory Leverage