Question
You use the following three stocks to create an index: KKR, LUV, and MAD. Their respective beginning-of-year prices are $50, $100, and $25, and their
You use the following three stocks to create an index: KKR, LUV, and MAD. Their respective beginning-of-year prices are $50, $100, and $25, and their end-of-year prices are $60, $98, and $30. The total number of shares outstanding is 100 MM for KKR, 60 MM for LUV and 40 MM for MAD. What is the return on the price-weighted index?
| A. | 6.98% | |
| B. | 7.44% | |
| C. | 8.02% | |
| D. | 9.11% |
Tiger King (TK) stock has both call and put options available with the same strike price but with two different expiration months, June and September. Among these options, the call option with the ___ expiration month and the put option with the ___ expiration month will have the greatest value.
| A. | June; June | |
| B. | September; September | |
| C. | September; June | |
| D. | June; September |
You short sell 200 shares of Arbitrage Art Corp. (AAC) at $50 per share and simultaneously submit a stop-buy order at $60. What is your maximum potential loss?
| A. | $12,000 | |
| B. | $2,000 | |
| C. | Unlimited | |
| D. | $10,000 |
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Money, Banking, Financial Markets & Institutions
Authors: Michael Brandl
2nd Edition
1337904821, 9781337904827
