3400-SP20-HW1 Design Layout References Mailings Review View Tell me Share 10 ~ A A Aav AD 5 Abbcode Alice dle AaBbCcDc ABCDE AaBb Accodes ADA Normal No Spacing Heading Heading 2 Title Dictate Pane 2. Suppose you decided to buy 100 shares of AMZN at $1750 a share with maximum margin. The margin interest is 6%. In one year, the stock price will either be $2330 or $1500. What is your gain/loss percentage with and without margin? Let's say the maintenance margin is 35%, what is the price that you will get a margin call? a. 3. 3: You shorted 1,000 shares of WDC at $55.6. Show your account equity position value. If the stock price felt to $40 in 6 months and the company paid $2.8 in dividends, what is your dollar gain and percentage gain? What if the price went up to $68 a share? (Hint: if you shorted stocks that pays dividends, you have to pay the dividends out of your account.) a. $12800 Loss and 23% Loss b. $15200 Gain and 27% Gain 4: You shorted 1,000 shares of MSFT at $145 a share. You got a margin call sometime after 3 months. The MM is 35%. What must be the stock price? a. 223.08 4. I asert Draw References Review Share Cambria 10 Albcode Normal Title Dicta Styles Pane UE 3400-SP20-HW1 Design Layout Mailings View Tell me - A A 21 Aattebete AaBCCD AkceDdEt AaBb Abd BIUXX APA No Spacing Heading Heading 2 1. You purchased 100 shares of INTC stock last year for $46.84. During the last 12 months, the company paid $1.84 in dividends and the stock price when up to $52.62. What is your holding period return in nominal term and percentage? What is your dividend yield? What is the stock's current dividend yield? a. My dividend yield is 3.9% whereas the companies yield is 3.4%. 2. Given the expected return of 12% for stocks and 6% for bonds, your retirement account is split between those two asset classes, how much money would have when you retire if you put in $5,000 each year and you work for 40 years? How much would you have if you put all your money in bonds? Or all your money in stocks? a. Bonds=773,809.83 Stocks=3,835,457.10 3. Buffett purchased Berkshire Hathaway stock at $13 a share in 1965. By 2005, BRK stock was trading at $140,000 a share. What is the geometric return for Buffett's investment in 40 years? 4. From 2002 to 2006, PBR stock has annual return of 25%, 18%, 22% 28% and 45%. What is the arithmetic average return, geometric return and variance? a. Arithmetic average return: 46.44% b. Geometric return: 27.28% Variance: 1.08% 5. A typical non-bank money transfer (such as MoneyGram) cost $15. If you were to transfer $150 to someone who needs those money in a different city every two weeks, what is the EAR for the transfer? What if you do it once a day? 10.426% b. Once a day: 10.5156% 6. The S&P500 Index has an annual return of 11.5% and 18% volatility over the last 80 years. For small cap stocks, it has been 15.6% for return and 21.2% for volatility. The average of the bond market index over the same period has return of 5.5% and 6.3% volatility. What is the 40-year forecast of range of return for all 3 asset classes? And what is unusual about the lower range for the stock market and the higher range for the bond market? C. a. 3400-SP20-HW1 Design Layout References Mailings Review View Tell me Share 10 ~ A A Aav AD 5 Abbcode Alice dle AaBbCcDc ABCDE AaBb Accodes ADA Normal No Spacing Heading Heading 2 Title Dictate Pane 2. Suppose you decided to buy 100 shares of AMZN at $1750 a share with maximum margin. The margin interest is 6%. In one year, the stock price will either be $2330 or $1500. What is your gain/loss percentage with and without margin? Let's say the maintenance margin is 35%, what is the price that you will get a margin call? a. 3. 3: You shorted 1,000 shares of WDC at $55.6. Show your account equity position value. If the stock price felt to $40 in 6 months and the company paid $2.8 in dividends, what is your dollar gain and percentage gain? What if the price went up to $68 a share? (Hint: if you shorted stocks that pays dividends, you have to pay the dividends out of your account.) a. $12800 Loss and 23% Loss b. $15200 Gain and 27% Gain 4: You shorted 1,000 shares of MSFT at $145 a share. You got a margin call sometime after 3 months. The MM is 35%. What must be the stock price? a. 223.08 4. I asert Draw References Review Share Cambria 10 Albcode Normal Title Dicta Styles Pane UE 3400-SP20-HW1 Design Layout Mailings View Tell me - A A 21 Aattebete AaBCCD AkceDdEt AaBb Abd BIUXX APA No Spacing Heading Heading 2 1. You purchased 100 shares of INTC stock last year for $46.84. During the last 12 months, the company paid $1.84 in dividends and the stock price when up to $52.62. What is your holding period return in nominal term and percentage? What is your dividend yield? What is the stock's current dividend yield? a. My dividend yield is 3.9% whereas the companies yield is 3.4%. 2. Given the expected return of 12% for stocks and 6% for bonds, your retirement account is split between those two asset classes, how much money would have when you retire if you put in $5,000 each year and you work for 40 years? How much would you have if you put all your money in bonds? Or all your money in stocks? a. Bonds=773,809.83 Stocks=3,835,457.10 3. Buffett purchased Berkshire Hathaway stock at $13 a share in 1965. By 2005, BRK stock was trading at $140,000 a share. What is the geometric return for Buffett's investment in 40 years? 4. From 2002 to 2006, PBR stock has annual return of 25%, 18%, 22% 28% and 45%. What is the arithmetic average return, geometric return and variance? a. Arithmetic average return: 46.44% b. Geometric return: 27.28% Variance: 1.08% 5. A typical non-bank money transfer (such as MoneyGram) cost $15. If you were to transfer $150 to someone who needs those money in a different city every two weeks, what is the EAR for the transfer? What if you do it once a day? 10.426% b. Once a day: 10.5156% 6. The S&P500 Index has an annual return of 11.5% and 18% volatility over the last 80 years. For small cap stocks, it has been 15.6% for return and 21.2% for volatility. The average of the bond market index over the same period has return of 5.5% and 6.3% volatility. What is the 40-year forecast of range of return for all 3 asset classes? And what is unusual about the lower range for the stock market and the higher range for the bond market? C. a