Purchase Solution

Cumulative Rate of Return of Stocks

Not what you're looking for?

Ask Custom Question

I need help with the attatched questions on stocks.

Attachments
Purchase this Solution
Solution Summary

This solution solves the cumulative rate of return.

Solution Preview

Question one
On Monday morning you sell one June T-bond futures contract at 97:27 or for $97843.75. The contracts face value is $100000. The initial margin requirement is $2700 and the maintenance margin requirement is $2000 per contract. Use the following data to answer the questions.
Day Settle
Monday $97 406.25
Tuesday $98 000.00
Wednesday $100 000.00

1. What is the balance on your margin account after Mondays close?
Date/Day Settlement Price ($) Mark-to-market Other entries Account Balance Explanation
Monday morning $97,843.75 0 $2700 $2700 Initial margin deposit of $2700.
Monday Closing $97,406.25 +$437.50 $3137.50 Price fell by 13/32 leaving profit by day end of $437.50
The balance in the margin account after the Monday close will be $3137.50

2. What is the cumulative rate of return on your investment at close of day on Tuesday?
Date/Day Settlement Price ($) Mark-to-market Other entries Account Balance Explanation
Monday morning $97,843.75 0 $2700 $2700 Initial margin deposit of $2700.
Monday ...

Purchase this Solution
Free BrainMass Quizzes
Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

View More Free Quizzes
Related BrainMass Solutions

  • Questions on Stock, Equity, Risk, Leverage,Ratios

    Cumulative preferred stocks are preferred stocks for which all passed (unpaid) dividends in arrears must be paid in additional shares of preferred stock prior to the payment of dividends to common stockholders. 33.

  • Explanation of preferred stocks

    Also, I think the majority of preferred stocks available today are cumulative. Very few companies miss preferred stock payments. However, if they do, it is a sign of cash flow problems, declining profits or mismanagement of the company.

  • Valuing bond and common stocks

    Solution to second problem depicts the steps to calculate required rate of return on a preferred stock. Solutions to other problems demonstrate the methodology to estimate the values of a coupon paying bond and common stocks.

  • Bonds and Their Valuation; Features of Preferred Stock

    The preferred stock of a given firm is generally less risky to investors than the same firm's common stock. c. Corporations cannot buy the preferred stocks of other corporations. d. Preferred dividends are not generally cumulative. e.

  • Quaker Oats annual report

    How is this return different from return on common equity? 2. Explain how Quaker oats arrives at a 3.6% risk premium needed by common shareholders as compensation for assuming the risks of Quaker Oats stocks. 3.

  • Investment Multiple Choice Questions

    Which of the following is not considered a leading economic indicator? a. Stock prices, 500 common stocks b. Money supply (M2) c. Index of consumer expectations d. 30 year mortgage rate Answer: d. 30 year mortgage rate 13.

  • Required rate of return and investment strategy

    (required) rate of return for the three stocks?

  • Accounting/Finance Multiple Choice

    This is probably its A)Cumulative total return over some number of years(B) Average annual total return over some years (C) Total return for the previous years (D) Return in relation to overall market 16)The Mark fund has a rate of return of 18%

  • Expected return and standard deviation of portfolio

    42671 Investment Analysis - Expected rate of return and standard deviation of a portfolio composed of bonds and stocks.

View More Related Solutions