Equity Trading
- Created by: axzolanski
- Created on: 16-01-22 17:57
Other questions in this quiz
2. An investor buys USD 80,000 of stock on a 50% initial margin with a 30% maintenance margin requirement. Shortly after buying the stock, the value of the investment falls from USD 80,000 to USD 66,000. At a stock value of USD 66,000, a margin call
- USD 40,000
- USD 19,800
- cont - would be made when the equity in the investor's margin account falls below what amount?
- USD 24,000
- USD 33,000
3. Which of the following statements is true in relation to short selling?
- Short sellers lend stocks they own to other parties.
- The short side of a trade is liable for delivery of the stock.
- The short position makes money when stock prices rise.
4. An investor believes that the stock of a large gas and oil company is likely to lose a lot of value in the near term and decides to take out a short position in the stock. The investor sells for USD 450 per share and the price drops to USD 380 at the
- Unlimited
- USD 130
- cont - next business day. This investor expects the price to drop to USD 250 at its lowest point. What is the potential loss (per share) that the investor is exposed to from this position?
- USD 200
- USD 70
5. The writer of an equity option has the obligation to sell a stock at a specified price in future. What type of option position is this?
- Short put
- Short call
- Long put
- Long call
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