Stock ABC is currently selling for $50 per share. Which of the following should have a higher selling price? a three-month call option on ABC stock with an exercise price $55 a three-month put option on ABC stock with an exercise price $55

In what way are market orders superior to limit orders?

Challenge The national order book for shares of ABC Corp. is: National Order Book Asks /Limit Sell Orders       Price Shares Dealer Ask $127 6,000   $126 1,500   $125 1,200   $124 300 Best Ask $123 120         Bids /Limit Buy Orders   Price Shares Best Bid $121 25   $120 63   $119 250   $118 313 Dealer Bid $117 1,250       Suppose a market order to sell 500 shares arrives from a fund manager. At what weighted-average price will this order be filled? (note: this spreads are unrealistically large. In reality, they would be $0.01) Enter your answer as a number of dollars, rounded to the nearest $0.01.

A market maker purchases financial securities as part of an SEO. Where did this transaction take place?

You bought 35 shares of a $80 stock on margin one year ago. Today, the stock is worth $87 per share. You initially posted 75% margin. Ignoring any interest due and margin calls, calculate your rate of return.

What role do money market securities play in a fund’s portfolio?

One year ago, an investor is quoted the following prices for ABC stock: Bid: $18.15 Ask: $18.35 During the year, ABC paid $0.95  in dividends. Today, the best price quotes for the stock are: Bid: $19.00 Ask: $19.35 Ignoring taxes, what return did the investor earn over the last year?

Which of the following best defines a short sale?

Suppose that you just short sold 100 shares of ABC stock for $45 per share. The initial margin requirement is 60%, which you cover by pledging T-bills as collateral. If the price of the stock falls to $38 per share, what return did you earn? Ignore the interest earned on T-bills.

Challenge The national order book for shares of ABC Corp. is: National Order Book Asks /Limit Sell Orders       Price Shares Dealer Ask $99 3,600   $98 900   $97 720   $96 180 Best Ask $95 72         Bids /Limit Buy Orders   Price Shares Best Bid $93 15   $92 38   $91 150   $90 188 Dealer Bid $89 750       Suppose a market order to sell 300 shares arrives from a fund manager. At what weighted-average price will this order be filled? (note: this spreads are unrealistically large. In reality, they would be $0.01) Enter your answer as a number of dollars, rounded to the nearest $0.01.