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Dakota Industries stock sells for $25 per share. You have $40,000 and the initial margin requirement is 55%. Partial shares may be purchased. If the stock price later falls to $18, what is your margin at that time?

An investor deposits $1,200 today. They add $500 at the end of Year 1 and $1,800 at the end of Year 4. The account’s annual returns from Year 1 to Year 5 are: 12%, –6%, 15%, –8%, and 7%. Compute the investor’ percentage dollar-weighted average return over the five-year period.

Randall Industries stock sells for $20 per share, and you have decided to purchase as many shares as you possibly can. You have $30,000 available to invest. Assuming the initial margin is 50 percent, and partial number of shares can be purchased.a) Construct your equity account balance sheet at the time of your purchase.b) Construct the balance sheet when the share price rises to $28. What is your percentage margin?c) Construct the balance sheet when the share price falls to $15 per share. What is your percentage margin?

Your grandmother invested $2,500 in a stock 40 years ago. Today, her account is worth $210,000. What is the percentage geometric average annual return?

The returns we have examined are not adjusted for inflation. What do you suppose would happen to our estimated risk premiums if we did account for inflation?

You bought a stock at $52. Seven months later, it pays a $0.90 dividend and you sell it for $61.a) What is the total percentage rate of return (HPR)?b) What is the percentage effective annual rate (EAR)?

Randall Industries stock sells for $20 per share, and you have decided to purchase as many shares as you possibly can. You have $30,000 available to invest. Assuming the initial margin is 50 percent, and partial number of shares can be purchased.a) Construct your equity account balance sheet at the time of your purchase.b) Construct the balance sheet when the share price rises to $28. What is your percentage margin?c) Construct the balance sheet when the share price falls to $15 per share. What is your percentage margin?

Brighton Technologies has identified an investment project with the following cash flows. If the discount rate is 7 percent, what is the future value of these cash flows in Year 4?YearCash Flow1$8802$1,2503$1,4804$1,620

You short-sell 800 shares of Polar Pixels, Inc. at $55. Initial margin requirement is 60%. When the price is $47, construct the equity balance sheet, find the percentage margin, and the effective annual return if you cover in 6 months.

An important difference between a long position in stock and a short position concerns the potential gains and losses. Suppose a stock sells for $18 per share and you trade 500 shares. What are your potential gains and losses for each type of position?