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Go to Yahoo Finance, search Tesla stock price information and find Historical Data. Download daily stock price of Tesla from Jan. 0 1 , 2
Go to Yahoo Finance, search Tesla stock price information and find "Historical Data".
Download daily stock price of Tesla from Jan. to Feb You don't need
to submit the downloaded data, but you need to use the data to finish following questions.
For simplicity, you can assume that it is possible to buy fractional shares.
a What is Tesla Adjusted Close price on Jan. and Feb.
b Suppose that it is the end of the day on Jan. and the Adjusted Close price is
the current Jan Tesla stock price. You have $ to invest and decide to
buy Tesla stock. At the end of the day on Feb. you decide to sell your position
in Tesla stock. What is your return? Hint: If you check Tesla's dividend payment by
select "Show: Dividends only" instead of "Show: Historical Prices", you will find Tesla
hasn't paid any dividend till now.
c Now suppose that on Jan you are extremely bullish on Tesla and wants to
buy on margin. You find a broker who has MMR of and charge you interest at a
rate of per day. You want to invest with an initial margin of How much
money you need to borrow from your broker? How many shares can you buy with the
borrowed money? What's your total shares of Tesla?
d In question c you are buying on margin on Jan Suppose that you sell all your
Tesla stocks at the end of the day on Feb. The principal and interest payment
of days' loan equals to borrowed amount: What is your return?
Compare this to the case where you didn't buy on margin. What lessons do you learn
about buying on margin?
e Suppose you don't sell Tesla on Feb. you want to hold it until Mar.
If the Tesla's price decrease to $ on Mar. Would you receive a margin
call on that day? What is your return? days
f Suppose you don't sell Tesla on Feb. you want to hold it until Mar.
If the Tesla price jumps to $ on Mar. If you would receive a margin
call on that day, how much additional funds you need to put in your account?
g How far can Tesla stock price fall before you get margin call? Assume no interest is
charged.
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