One year ago, an investor is quoted the following prices for…

One year ago, an investor is quoted the following prices for ABC stock: Bid: $21.20 Ask: $21.50 During the year, ABC paid $1.00  in dividends. Today, the best price quotes for the stock are: Bid: $19.25 Ask: $19.60 Ignoring taxes, what return did the investor earn over the last year?

Suppose that you just short sold 100 shares of ABC stock for…

Suppose that you just short sold 100 shares of ABC stock for $80 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 $67 per share, what return did you earn? Ignore the interest earned on T-bills.

Suppose that you just short sold 100 shares of ABC stock for…

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.

Math Question 6: Suppose that USD/sterling spot rate is 1.55…

Math Question 6: Suppose that USD/sterling spot rate is 1.558, the 90-day forward rate is 1.5556, and the 180-day forward rate is 1.5518. Identify the arbitrage opportunities in the following situations:(a) A 180-day European call option to buy £1 for $1.52 costs 2 cents. (b) A 90-day European put option to sell £1 for $1.59 costs 2 cents. Ignore the time value of money in your computations. Clearly state the strategy for each part and calculate the arbitrage profit. Once completed, select “True” below.