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投资学习题第一篇投资学课后习题与答案乮博迪乯_第6版 由flyesun 从网络下载丆版权归原作者所有。
1. 假设你发现一只装有1 00亿美元的宝箱。
a. 这是实物资产还是金融资产？b. 社会财富会因此而增加吗？c. 你会更富有吗？d. 你能解释你回答b 、c 时的矛盾吗？有没有人因为这个发现而受损呢？2. Lanni Products 是一家新兴的计算机软件开发公司，它现有计算机设备价值30 000美元，以及由L a n n i 的所有者提供的20 000美元现金。
在下面的交易中，指明交易涉及的实物资产或(和)金融资产。
在交易过程中有金融资产的产生或损失吗？a. Lanni 公司向银行贷款。
它共获得50 000美元的现金，并且签发了一张票据保证3年内还款。
b. Lanni 公司使用这笔现金和它自有的20 000美元为其一新的财务计划软件开发提供融资。
c. L a n n i 公司将此软件产品卖给微软公司( M i c r o s o f t )，微软以它的品牌供应给公众，L a n n i 公司获得微软的股票1 500股作为报酬。
d. Lanni 公司以每股80美元的价格卖出微软的股票，并用所获部分资金偿还贷款。
3. 重新考虑第2题中的Lanni Products 公司。
a. 在它刚获得贷款时处理其资产负债表，它的实物资产占总资产的比率为多少？b. 在L a n n i 用70 000美元开发新产品后，处理资产负债表，实物资产占总资产比例又是多少？c. 在收到微软股票后的资产负债表中，实物资产占总资产的比例是多少？4. 检察金融机构的资产负债表，有形资产占总资产的比率为多少？对非金融公司这一比率又如何？为什么会有这样的差异？5. 20世纪6 0年代，美国政府对海外投资者所获得的在美国出售的债券的利息征收 3 0%预扣税(这项税收现已被取消)，这项措施和与此同时欧洲债券市场(美国公司在海外发行以美元计值的债券的市场)的成长有何关系？6. 见图1 -7，它显示了美国黄金证券的发行。
CHAPTER 1: THE INVESTMENT ENVIRONMENTPROBLEM SETS1.Ultimately, it is true that real assets determine the material wellbeing of an economy. Nevertheless, individuals can benefit whenfinancial engineering creates new products that allow them tomanage their portfolios of financial assets more efficiently.Because bundling and unbundling creates financial products with new properties and sensitivities to various sources of risk, it allowsinvestors to hedge particular sources of risk more efficiently.2.Securitization requires access to a large number of potentialinvestors. To attract these investors, the capital market needs:1. a safe system of business laws and low probability ofconfiscatory taxation/regulation;2. a well-developed investment banking industry;3. a well-developed system of brokerage and financial transactions,and;4.well-developed media, particularly financial reporting.These characteristics are found in (indeed make for) a well-developed financial market.3.Securitization leads to disintermediation; that is, securitizationprovides a means for market participants to bypass intermediaries.For example, mortgage-backed securities channel funds to thehousing market without requiring that banks or thrift institutionsmake loans from their own portfolios. As securitization progresses, financial intermediaries must increase other activities such asproviding short-term liquidity to consumers and small business, and financial services.4.Financial assets make it easy for large firms to raise the capitalneeded to finance their investments in real assets. If Ford, forexample, could not issue stocks or bonds to the general public, itwould have a far more difficult time raising capital. Contractionof the supply of financial assets would make financing moredifficult, thereby increasing the cost of capital. A higher costof capital results in less investment and lower real growth.5.Even if the firm does not need to issue stock in any particularyear, the stock market is still important to the financial manager.The stock price provides important information about how the market values the firm's investment projects. For example, if the stockprice rises considerably, managers might conclude that the marketbelieves the firm's future prospects are bright. This might be auseful signal to the firm to proceed with an investment such as anexpansion of the firm's business.In addition, shares that can be traded in the secondary market aremore attractive to initial investors since they know that they will be able to sell their shares. This in turn makes investors morewilling to buy shares in a primary offering, and thus improves theterms on which firms can raise money in the equity market.6. a. No. The increase in price did not add to the productivecapacity of the economy.b.Yes, the value of the equity held in these assets has increased.c.Future homeowners as a whole are worse off, since mortgageliabilities have also increased. In addition, this housing pricebubble will eventually burst and society as a whole (and mostlikely taxpayers) will endure the damage.7. a. The bank loan is a financial liability for Lanni. (Lanni's IOUis the bank's financial asset.) The cash Lanni receives is afinancial asset. The new financial asset created is Lanni'spromissory note (that is, Lanni’s IOU to the bank).nni transfers financial assets (cash) to the softwaredevelopers. In return, Lanni gets a real asset, the completedsoftware. No financial assets are created or destroyed; cash issimply transferred from one party to another.nni gives the real asset (the software) to Microsoft inexchange for a financial asset, 1,500 shares of Microsoft stock.If Microsoft issues new shares in order to pay Lanni, then thiswould represent the creation of new financial assets.nni exchanges one financial asset (1,500 shares of stock) foranother ($120,000). Lanni gives a financial asset ($50,000 cash)to the bank and gets back another financial asset (its IOU). Theloan is "destroyed" in the transaction, since it is retired whenpaid off and no longer exists.8. a.Assets Shareholders’ equityLiabilities &Cash $ 70,000 Bank loan $ 50,000Computers 30,000 Shareholders’ equity 50,000Total $100,000 Total $100,000 Ratio of real assets to total assets = $30,000/$100,000 = 0.30b.Assets Shareholders’ equity Liabilities & Software product* $ 70,000 Bank loan $ 50,000Computers 30,000 Shareholders’ equity 50,000Total $100,000 Total $100,000 *Valued at costRatio of real assets to total assets = $100,000/$100,000 = 1.0c.Assets Shareholders’ equity Liabilities &Microsoft shares $120,000 Bank loan $ 50,000 Computers 30,000Shareholders’ equity 100,000Total $150,000 Total $150,000 Ratio of real assets to total assets = $30,000/$150,000 = 0.20Conclusion: when the firm starts up and raises working capital, itis characterized by a low ratio of real assets to total assets.When it is in full production, it has a high ratio of real assets to total assets. When the project "shuts down" and the firm sells itoff for cash, financial assets once again replace real assets.9.For commercial banks, the ratio is: $140.1/$11,895.1 = 0.0118 Fornon-financial firms, the ratio is: $12,538/$26,572 = 0.4719 Thedifference should be expected primarily because the bulk of thebusiness of financial institutions is to make loans; which arefinancial assets for financial institutions.10. a. Primary-market transactionb.Derivative assetsc.Investors who wish to hold gold without the complication and costof physical storage.11. a. A fixed salary means that compensation is (at least in theshort run) independent of the firm's success. This salarystructure does not tie the manager’s immediate compensation to the success of the firm. However, the manager might view this as thesafest compensation structure and therefore value it more highly.b.A salary that is paid in the form of stock in the firm means thatthe manager earns the most when the shareholders’ wealth ismaximized. Five years of vesting helps align the interests ofthe employee with the long-term performance of the firm. Thisstructure is therefore most likely to align the interests ofmanagers and shareholders. If stock compensation is overdone,however, the manager might view it as overly risky since themanager’s career is already linked to the firm, and thisundiversified exposure would be exacerbated with a large stockposition in the firm.c. A profit-linked salary creates great incentives for managers tocontribute to the firm’s success. However, a manager w hosesalary is tied to short-term profits will be risk seeking,especially if these short-term profits determine salary or if thecompensation structure does not bear the full cost of theproject’s risks. Shareholders, in contrast, bear the losses aswell as the gains on the project, and might be less willing toassume that risk.12.Even if an individual shareholder could monitor and improvemanagers’ performance, and thereby increase the value of the firm, the payoff would be small, since the ownership share in a largecorporation would be very small. For example, if you own $10,000of Ford stock and can increase the value of the firm by 5%, a veryambitious goal, you benefit by only: 0.05 × $10,000 = $500In contrast, a bank that has a multimillion-dollar loan outstanding to the firm has a big stake in making sure that the firm can repaythe loan. It is clearly worthwhile for the bank to spendconsiderable resources to monitor the firm.13.Mutual funds accept funds from small investors and invest, onbehalf of these investors, in the national and internationalsecurities markets.Pension funds accept funds and then invest, on behalf of currentand future retirees, thereby channeling funds from one sector ofthe economy to another.Venture capital firms pool the funds of private investors andinvest in start-up firms. Banks accept deposits from customers andloan those funds to businesses, or use the funds to buy securitiesof large corporations.14.Treasury bills serve a purpose for investors who prefer a low-riskinvestment. The lower average rate of return compared to stocks isthe price investors pay for predictability of investmentperformance and portfolio value.15.With a “top-down” investin g style, you focus on asset allocationor the broad composition of the entire portfolio, which is themajor determinant of overall performance. Moreover, top-downmanagement is the natural way to establish a portfolio with a levelof risk consistent with your risk tolerance. The disadvantage ofan exclusive emphasis on top-down issues is that you may forfeitthe potential high returns that could result from identifying andconcentrating in undervalued securities or sectors of the market.With a “bottom-u p” investing style, you try to benefit fromidentifying undervalued securities. The disadvantage is that youtend to overlook the overall composition of your portfolio, which may result in a non-diversified portfolio or a portfolio with a risklevel inconsistent with your level of risk tolerance. In addition,this technique tends to require more active management, thusgenerating more transaction costs. Finally, your analysis may beincorrect, in which case you will have fruitlessly expended effortand money attempting to beat a simple buy-and-hold strategy.16.You should be skeptical. If the author actually knows how toachieve such returns, one must question why the author would thenbe so ready to sell the secret to others. Financial markets arevery competitive; one of the implications of this fact is thatriches do not come easily. High expected returns require bearingsome risk, and obvious bargains are few and far between. Odds arethat the only one getting rich from the book is its author.17.Financial assets provide for a means to acquire real assets as wellas an expansion of these real assets. Financial assets provide ameasure of liquidity to real assets and allow for investors to moreeffectively reduce risk through diversification.18.Allowing traders to share in the profits increases the traders’willingness to assume risk. Traders will share in the upsidepotential directly but only in the downside indirectly (poorperformance = potential job loss). Shareholders, by contrast, areaffected directly by both the upside and downside potential of risk.19.Answers may vary, however, students should touch on the following:increased transparency, regulations to promote capital adequacy byincreasing the frequency of gain or loss settlement, incentives todiscourage excessive risk taking, and the promotion of moreaccurate and unbiased risk assessment.CHAPTER 2: ASSET CLASSES AND FINANCIALINSTRUMENTSPROBLEM SETS1.Preferred stock is like long-term debt in that it typicallypromises a fixed payment each year. In this way, it is aperpetuity. Preferred stock is also like long-term debt inthat it does not give the holder voting rights in the firm.Preferred stock is like equity in that the firm is under nocontractual obligation to make the preferred stock dividendpayments. Failure to make payments does not set off corporatebankruptcy. With respect to the priority of claims to the assets of the firm in the event of corporate bankruptcy, preferred stock has a higher priority than common equity but a lower prioritythan bonds.2.Money market securities are called “cash equivalents” becauseof their great liquidity. The prices of money marketsecurities are very stable, and they can be converted to cash(i.e., sold) on very short notice and with very low transactioncosts.3.(a) A repurchase agreement is an agreement whereby theseller of a security agrees to “repurchase” it from the buyeron an agreed upon date at an agreed upon price. Repos aretypically used by securities dealers as a means for obtainingfunds to purchase securities.4.The spread will widen. Deterioration of the economy increasescredit risk, that is, the likelihood of default. Investorswill demand a greater premium on debt securities subject todefault risk.5.6.Municipal Bond interest is tax-exempt. When facing highermarginal tax rates, a high-income investor would be more inclined to pick tax-exempt securities.7. a. You would have to pay the asked price of:86:14 = 86.43750% of par = $864.375b.The coupon rate is 3.5% implying coupon payments of $35.00annually or, more precisely, $17.50 semiannually.c.Current yield = Annual coupon income/price= $35.00/$864.375 = 0.0405 = 4.05%8.P = $10,000/1.02 = $9,803.929.The total before-tax income is $4. After the 70% exclusion forpreferred stock dividends, the taxable income is: 0.30 × $4 =$1.20Therefore, taxes are: 0.30 × $1.20 = $0.36After-tax income is: $4.00 – $0.36 = $3.64Rate of return is: $3.64/$40.00 = 9.10%10. a. You could buy: $5,000/$67.32 = 74.27 sharesb.Your annual dividend income would be: 74.27 × $1.52 =$112.89c.The price-to-earnings ratio is 11 and the price is $67.32.Therefore:$67.32/Earnings per share = 11 ⇒ Earnings per share = $6.12d.General Dynamics closed today at $67.32, which was $0.47higher than yesterday’s price. Yesterday’s closing pricewas: $66.8511. a. At t = 0, the value of the index is: (90 + 50 + 100)/3 = 80At t = 1, the value of the index is: (95 + 45 + 110)/3 =83.333The rate of return is: (83.333/80) − 1 = 4.17%b.In the absence of a split, Stock C would sell for 110, sothe value of the index would be: 250/3 = 83.333After the split, Stock C sells for 55. Therefore, we needto find the divisor (d) such that: 83.333 = (95 + 45 +55)/d ⇒ d = 2.340c.The return is zero. The index remains unchanged becausethe return for each stock separately equals zero.12. a. Total market value at t = 0 is: ($9,000 + $10,000 + $20,000)= $39,000Total market value at t = 1 is: ($9,500 + $9,000 + $22,000) = $40,500Rate of return = ($40,500/$39,000) – 1 = 3.85%b.The return on each stock is as follows:r A = (95/90) – 1 =0.0556 r B = (45/50) –1 = –0.10 r C =(110/100) – 1 = 0.10The equally-weighted average is:[0.0556 + (-0.10) + 0.10]/3 = 0.0185 = 1.85%13.The after-tax yield on the corporate bonds is: 0.09 × (1 – 0.30)= 0.0630 = 6.30% Therefore, municipals must offer at least 6.30% yields.14.Equation (2.2) shows that the equivalent taxable yield is: r = r m/(1 – t)a. 4.00%b. 4.44%c. 5.00%d. 5.71%15.In an equally-weighted index fund, each stock is given equalweight regardless of its market capitalization. Smaller capstocks will have the same weight as larger cap stocks. Thechallenges are as follows:•Given equal weights placed to smaller cap and larger cap, equalweighted indices (EWI) will tend to be morevolatile than their market-capitalizationcounterparts;•It follows that EWIs are not good reflectors of the broad market which they represent; EWIs underplay theeconomic importance of larger companies;•Turnover rates will tend to be higher, as an EWI mustbe rebalanced back to its original target. By design,many of the transactions would be among the smaller,less-liquid stocks.16. a. The higher coupon bond.b.The call with the lower exercise price.c.The put on the lower priced stock.17. a. You bought the contract when the futures price was $3.835(see Figure2.10). The contract closes at a price of $3.875, which is$0.04 more than the original futures price. The contractmultiplier is 5000. Therefore, the gain will be: $0.04 ×5000 = $200.00b.Open interest is 177,561 contracts.18. a. Since the stock price exceeds the exercise price, youexercise the call.The payoff on the option will be: $21.75 − $21 = $0.75The cost was originally $0.64, so the profit is: $0.75 −$0.64 = $0.11b.If the call has an exercise price of $22, you would notexercise for any stock price of $22 or less. The loss onthe call would be the initial cost: $0.30c.Since the stock price is less than the exercise price, youwill exercise the put.The payoff on the option will be: $22 − $21.75 = $0.25The option originally cost $1.63 so the profit is: $0.25 −$1.63 = −$1.3819.There is always a possibility that the option will be in-the-money at some time prior to expiration. Investors will paysomething for this possibility of a positive payoff.20.Value of call at expiration Initial Cost Profita.0 4 -4b.0 4 -4c.0 4 -4d. 5 4 1e.10 4 6Value of put at expiration Initial Cost Profita.10 6 4b. 5 6 -1c.0 6 -6d.0 6 -6e.0 6 -621. A put option conveys the right to sell the underlying asset atthe exercise price. A short position in a futures contractcarries an obligation to sell the underlying asset at thefutures price.22. A call option conveys the right to buy the underlying asset atthe exercise price. A long position in a futures contractcarries an obligation to buy the underlying asset at thefutures price.CFA PROBLEMS1.(d)2.The equivalent taxable yield is: 6.75%/(1 − 0.34) = 10.23%3.(a) Writing a call entails unlimited potential losses as thestock price rises.4. a. The taxable bond. With a zero tax bracket, the after-taxyield for the taxable bond is the same as the before-taxyield (5%), which is greater than the yield on the municipal bond.b. The taxable bond. The after-tax yield for the taxablebond is:0.05 × (1 – 0.10) = 4.5%c. You are indifferent. The after-tax yield for the taxable bond is:0.05 × (1 – 0.20) = 4.0%The after-tax yield is the same as that of the municipalbond.d. The municipal bond offers the higher after-tax yield forinvestors in tax brackets above 20%.5.If the after-tax yields are equal, then: 0.056 = 0.08 × (1 – t)This implies that t = 0.30 =30%.CHAPTER 3: HOW SECURITIES ARE TRADEDPROBLEM SETS1.Answers to this problem will vary.2.The dealer sets the bid and asked price. Spreads should be higheron inactively traded stocks and lower on actively traded stocks.3. a. In principle, potential losses are unbounded, growing directlywith increases in the price of IBM.b.If the stop-buy order can be filled at $128, the maximumpossible loss per share is $8, or $800 total. If the price ofIBM shares goes above $128, then the stop-buy order would beexecuted, limiting the losses from the short sale.4.(a) A market order is an order to execute the trade immediatelyat the best possible price. The emphasis in a market order is thespeed of execution (the reduction of execution uncertainty). Thedisadvantage of a market order is that the price it will be executed at is not known ahead of time; it thus has price uncertainty.5.(a) The advantage of an Electronic Crossing Network (ECN) isthat it can execute large block orders without affecting the public quote. Since this security is illiquid, large block orders are less likely to occur and thus it would not likely trade through an ECN.Electronic Limit-Order Markets (ELOM) transact securities withhigh trading volume. This illiquid security is unlikely to betraded on an ELOM.6. a. The stock is purchased for: 300 × $40 = $12,000The amount borrowed is $4,000. Therefore, the investor put upequity, or margin, of $8,000.b.If the share price falls to $30, then the value of the stockfalls to $9,000. By the end of the year, the amount of theloan owed to the broker grows to: $4,000 × 1.08 = $4,320Therefore, the remaining margin in the investor’saccount is: $9,000 − $4,320 = $4,680The percentage margin is now: $4,680/$9,000 = 0.52 = 52%Therefore, the investor will not receive a margin call.c.The rate of return on the investment over the year is:(Ending equity in the account − Initial equity)/Initialequity= ($4,680 − $8,000)/$8,000 = −0.415 = −41.5%7. a. The initial margin was: 0.50 × 1,000 × $40 = $20,000As a result of the increase in the stock price Old EconomyTraders loses:$10 × 1,000 = $10,000Therefore, margin decreases by $10,000. Moreover, OldEconomy Traders must pay the dividend of $2 per share to thelender of the shares, so that the margin in the accountdecreases by an additional $2,000. Therefore, the remainingmargin is:$20,000 – $10,000 – $2,000 = $8,000b.The percentage margin is: $8,000/$50,000 = 0.16 = 16% So therewill be a margin call.c.The equity in the account decreased from $20,000 to $8,000 inone year, for a rate of return of: (−$12,000/$20,000) = −0.60 =−60%8. a. The buy order will be filled at the best limit-sell orderprice: $50.25b.The next market buy order will be filled at the next-bestlimit-sell order price: $51.50c.You would want to increase your inventory. There isconsiderable buying demand at prices just below $50, indicatingthat downside risk is limited. In contrast, limit sell ordersare sparse, indicating that a moderate buy order could resultin a substantial price increase.9. a. You buy 200 shares of Telecom for $10,000. These sharesincrease in value by10%, or $1,000. You pay interest of: 0.08 × $5,000 = $400The rate of return will be: $1,000 −$400 = 0.12 12%=$5,000b.The value of the 200 shares is 200P. Equity is (200P –$5,000). You will receive a margin call when:= 0.30 ⇒ when P = $35.71 or lower10. a. Initial margin is 50% of $5,000 or $2,500.b.Total assets are $7,500 ($5,000 from the sale of the stock and$2,500 put up for margin). Liabilities are 100P. Therefore,equity is ($7,500 – 100P). A margin call will be issued when:$7,500 −100P= 0.30 ⇒ when P = $57.69 or higher100P11.The total cost of the purchase is: $40 × 500 = $20,000You borrow $5,000 from your broker, and invest $15,000 of your own funds. Your margin account starts out with equity of $15,000.a. (i) Equity increases to: ($44 × 500) – $5,000 =$17,000 Percentage gain = $2,000/$15,000 = 0.1333= 13.33% (ii) With price unchanged, equity isunchanged.Percentage gain = zero(iii) Equity falls to ($36 × 500) – $5,000 = $13,000Percentage gain = (–$2,000/$15,000) = –0.1333 = –13.33%The relationship between the percentage return and thepercentage change in the price of the stock is given by:% return = % change in price ×Total investment= %change in price × 1.333Investor's initial equityFor example, when the stock price rises from $40 to $44, thepercentage change in price is 10%, while the percentage gain forthe investor is:% return = 10% ×$20,000= 13.33%$15,000b.The value of the 500 shares is 500P. Equity is (500P –$5,000). You will receive a margin call when:= 0.25 ⇒ when P = $13.33 or lowerc.The value of the 500 shares is 500P. But now you have borrowed$10,000 instead of $5,000. Therefore, equity is (500P –$10,000). You will receive a margin call when:= 0.25 ⇒ when P = $26.67 or lowerWith less equity in the account, you are far more vulnerable toa margin call.d.By the end of the year, the amount of the loan owed to thebroker grows to:$5,000 × 1.08 = $5,400The equity in your account is (500P – $5,400). Initial equitywas $15,000. Therefore, your rate of return after one year isas follows:(i) = 0.1067 = 10.67%(ii) = –0.0267 = –2.67%(iii) = –0.1600 = –16.00%The relationship between the percentage return and thepercentage change in the price of Intel is given by:% return = % change in price× Investor'Total investments initial equity−8%×Investor'Fundss borrowedinitial equityFor example, when the stock price rises from $40 to $44, thepercentage change in price is 10%, while the percentage gainfor the investor is:10%× $20,000−8%× $5,000 =10.67%$15,000$15,000e.The value of the 500 shares is 500P. Equity is (500P –$5,400). You will receive a margin call when:= 0.25 ⇒ when P = $14.40 or lower12. a. The gain or loss on the short position is: (–500 ×ΔP)Invested funds = $15,000Therefore: rate of return = (–500 ×ΔP)/15,000 The rate of return in eachof the three scenarios is:(i)rate of return = (–500 × $4)/$15,000 = –0.1333 = –13.33%(ii)rate of return = (–500 × $0)/$15,000 = 0%(iii)rate of return = [–500 × (–$4)]/$15,000 = +0.1333 =+13.33%b.Total assets in the margin account equal:$20,000 (from the sale of the stock) + $15,000 (the initialmargin) = $35,000 Liabilities are 500P. You will receive amargin call when:$35,000 −500P= 0.25 ⇒ when P = $56 or higher500Pc.With a $1 dividend, the short position must now pay on theborrowed shares: ($1/share × 500 shares) = $500. Rate of returnis now:[(–500 ×ΔP) – 500]/15,000(i)rate of return = [(–500 × $4) – $500]/$15,000 = –0.1667= –16.67%(ii)rate of return = [(–500 × $0) – $500]/$15,000 = –0.0333 = –3.33%(iii)rate of return = [(–500) × (–$4) – $500]/$15,000 =+0.1000 = +10.00% Total assets are $35,000, and liabilitiesare (500P + 500). A margin call will be issued when:= 0.25 ⇒ when P = $55.20 or higher13.The broker is instructed to attempt to sell your Marriott stock assoon as the Marriott stock trades at a bid price of $20 or less.Here, the broker will attempt to execute, but may not be able tosell at $20, since the bid price is now $19.95. The price at which you sell may be more or less than $20 because the stop-loss becomesa market order to sell at current market prices.14. a. $55.50b.$55.25c.The trade will not be executed because the bid price is lowerthan the price specified in the limit sell order.d.The trade will not be executed because the asked price isgreater than the price specified in the limit buy order.15. a. In an exchange market, there can be price improvement in thetwo market orders. Brokers for each of the market orders (i.e., the buy order and the sell order) can agree to execute a trade insidethe quoted spread. For example, they can trade at $55.37, thusimproving the price for both customers by $0.12 or $0.13 relative to the quoted bid and asked prices. The buyer gets the stock for $0.13 less than the quoted asked price, and the seller receives $0.12 more for the stock than the quoted bid price.b.Whereas the limit order to buy at $55.37 would not be executedin a dealer market (since the asked price is $55.50), it couldbe executed in an exchange market. A broker for anothercustomer with an order to sell at market would view the limitbuy order as the best bid price; the two brokers could agree tothe trade and bring it to the specialist, who would thenexecute the trade.16. a. You will not receive a margin call. You borrowed $20,000 andwith another $20,000 of your own equity you bought 1,000 shares of Disney at $40 per share. At $35 per share, the market value of the stock is $35,000, your equity is $15,000, and the percentage margin is: $15,000/$35,000 = 42.9% Your percentage margin exceeds therequired maintenance margin.b.You will receive a margin call when:= 0.35 ⇒ when P = $30.77 or lower17.The proceeds from the short sale (net of commission) were: ($21 ×100) – $50 = $2,050 A dividend payment of $200 was withdrawn from the account.Covering the short sale at $15 per share costs (with commission): $1,500 + $50 = $1,550Therefore, the value of your account is equal to the net profit on the transaction: $2,050 – $200 – $1,550 = $300Note that your profit ($300) equals (100 shares × profit per share of $3). Your net proceeds per share was:$21 selling price of stock–$15 repurchase price of stock–$ 2 dividend per share–$ 1 2 trades × $0.50 commission per share$ 3。
