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I have investment and finance questions I need help with in 30 minutes. June call and put options on King Books Inc. are available with
I have investment and finance questions I need help with in 30 minutes.
June call and put options on King Books Inc. are available with exercise prices of $30, $35, and $40. Among the different exercise prices, the call option with the _____ exercise price and the put option with the _____ exercise price will have the greatest value. $40;$30 $30;40 $35;$35 $40;$40 You purchased 250 shares of common stock on margin for $25 per share. The initial margin is 65%, and the stock pays no dividend. Your rate of return would be __________ if you sell the stock at $32 per share. Ignore interest on margin. 35% 39% 43% 28% Purchases of new issues of stock take place _________. At the desk of the fed In the primary market In the secondary market In the money markets The maximum loss a buyer of a stock call option can suffer is the _________. Call Premium Stock Price Stock price minus the value of the call Strike price minus the stock price __________ often accompany short sales and are used to limit potential losses from the short position. Limit orders Restricted orders Limit loss orders Stop-buy orders A put option on Dr. Pepper Snapple Group, Inc., has an exercise price of $45. The current stock price is $41. The put option is _________. At the money Out of the money In the money Knocked out The value of a listed put option on a stock is lower when: I. The exercise price is higher. II. The contract approaches maturity III. The stock decreases in value. IV. A stock split occurs. II only II and IV only I,II, and IV only All four An order to buy or sell a security at the current price is a ______________. Limit Order Market Order Stop-loss order Stop-buy order You sell short 200 shares of Doggie Treats Inc. that are currently selling at $25 per share. You post the 50% margin required on the short sale. If your broker requires a 30% maintenance margin, at what stock price will you get a margin call? (You earn no interest on the funds in your margin account, and the firm does not pay any dividends.) $28.84 $35.71 $31.50 $32.35 If you thought prices of stock would be rising over the next few months, you might want to __________________ on the stock. Purchase a call option Purchase a put option Sell a futures contract Place a short-sale orderStep by Step Solution
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