Figure 3.2- Why is there such a difference?

Ch 2
- Buy future contract if you expect it to go up, sell future contract if you expect
the price to go down.
- 1 Call option is for 100 shares
- Signaling Theory. May increase demand and lower supply, Price goes up. Look
up
Ch 3
- S corporation is different, No corporate taxes, only tax is the individual rate
- Can sell bonds over a 2 year period, can wait to sell part to see if interest rate
changes, Called shelf registration
- Most IPOs are under priced, usually due to get a big bounce/increase on a
stock and generate a buzz
- Tends to trail off after, most IPOs do not over perform others in the same
sector
- Small issues of stock to go public sometimes the cost is 35% to the
investment banker.
- Dealer transaction when firm like Merell sells stock from inventory, Broker
transaction Lynch sets you up with whom has the stock
- Increase Profit increase price, good in short run.
- Margin is at 30 cents, you have to put up 30 cents on the dollar worth of
equity, brokerage firm could only loan you 70 cents
- Short selling, borrow from brokerage firm