Answer:
13.33%
Explanation:
Short sale = 500 shares × $25 = $12500
Margin required to be deposited as a percentage of transaction of short sale = $12500 × 60% = $7500
Rate after one year, $23
A short position will be squared by a reverse long (buy) position,
Thus, 500 shares long at $ 23 = 500 shares × 23 = $11,500
Thus, gain on the transaction:
= Short sale value - long buy value
= $12,500 - $11500
= $1000
Since, the contract being derivative wherein only net amount i.e $1000 would be transacted, i.e actually received here, the money invested is $7500 which was deposited in the margin account.
Rate of return after 1 year would be = 
= 
= 13.33%
Answer:
D1 = $3.50
D2 = $3.50
D3 = $3.50
Ke = 10% = 0.1
Po = <u>D1</u> + <u>D2</u> + <u>D3
</u>
(1+ke) (1+ke)2 (1+ke)3
Po = <u>$3.50</u> + <u>$3.50</u> + <u>$3.50
</u>
(1+0.1) (1+0.1)2 (1+0.1)3
Po = $3.18 + $2.89 + $2.63
Po = $8.70
None of the above
Explanation:
In this scenario, we need to discount the dividend in each year by the required at rate of return of 10%. The aggregate of the price obtained as a result of discounting in year 1 to year 3 gives the current market price.
Answer:1. Increase in supply; increase; decrease
2. Decrease in supply; decrease; increase
3. Increase in supply; increase; decrease
4. Decrease in quantity supplied; decrease; decrease
Explanation:
Calculate ever single number then subtract and find the lcf
Answer:
b) Debit Sales Returns and Allowances $2,300 and credit Accounts Receivable $2,300 in the general journal.
Explanation:
When goods were sold on account, Accounts receivables is debited, and Sales is credited. When goods are returned, Sales Return & Allowances is debited, and Accounts receivables is credited.
Thus, the entry will include Debit in Sales Returns and Allowances $2,300 and Credit in Accounts Receivable $2,300
