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Suppose your tax bracket is 28%. Would you prefer to earn a 6% taxable return or a 4% tax-free yield?What is the equivalent taxable yield of the 4% tax-free yield?
The offering price of an open-end fund is $12.30 per share and the fund is sold with a front-end load of 5%.What is its net asset value? (Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Assume you sell short 100 shares of common stock at $30 per share, with initial margin at 50%.What would be your rate of return if you repurchase the stock at $35 per share?The stock paid no dividends during the period, and you did not remove any money from the account before making the offsetting transaction.
Old Economy Traders opened an account to short-sell 1,000 shares of Internet Dreams from the previous question. The initial margin requirement was 50%. (The margin account pays no interest.) A year later, the price of Internet Dreams has risen from $40 to $50, and the stock has paid a dividend of $2 per share.a. What is the remaining margin in the account?b. If the maintenance margin requirement is 30%, will Old Economy receive a margin call? c. What is the rate of return on the investment?