Answered step by step
Verified Expert Solution
Question
1 Approved Answer
can you explain why highlighted are correct 6. An investor buys $16,000 worth of a stock priced at $20 per share using 60% initial margin.
can you explain why highlighted are correct 6. An investor buys $16,000 worth of a stock priced at $20 per share using 60% initial margin. The broker charges 8% on the margin loan and requires a 35% maintenance margin. The stock pays a $.50-per-share dividend in 1 year, and then the stock is sold at $25 per share. What was the investor's rate of return? 7. An investor in a 72% tax bracket is trying to decide whether to invest in a municipal bond or a corporate bond. She looks up municipal bond yields (rm) but wishes to calculate the taxable equivalent yield r. The formula she should use is given by A. rIm(128%) B. r=rm/(172%) C. r=rm(172%) D. r=rm/(128%) 8. Three stocks have share prices of $12,$75, and $30 with total market values of $400 million, $350 million, and $150 million, respectively. If you were to construct a price-weighted index of the three stocks with divisor =0.3, what would be the index value? A. 390 (B) 39 C. 43 D. 430 E. None of the above
can you explain why highlighted are correct
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started