Tên: Nguyễn Thủy Trúc

Lớp: FNC06
MSSV: 31211021522

Ex 11/118:
Answer:
P= $20. Buy 1000 shares. E = $15000. L = $5000. IR = 8%
a/ Percentage increase in the net worth of your brokerage account
P’=$22
E = V – L = 22*1000 – 5000 = $17000
% ∆ E = 17000-15000/15000= 13,33%
P’=$20
E = V – L = 20*1000 – 5000 = $15000
% ∆ E = 15000-15000/15000= 0%
P’=$18
E = V – L = 18*1000 – 5000 = $13000
% ∆ E = 13000-15000/15000= -13,33%
The relationship between percentage return and the percentage change in the price
V
% return = % price change * = %price change * 1,333
E
For instance:
P’=$22 => % price change = 22-20/20 = 10%
20∗1000
=> % return = 10% * = 13,33%
15000

b/ MM=25%, how low can Intel’s price fall before you get a margin call?
E 1000∗P−5000
MM= = = 25% => P= $6,67
V 1000∗P
c/ E=10000. How would your answer to b/ change?
=> L = 20000-10000=10000
E 1000∗P−10000
MM= = = 25% => P= $13,33
V 1000∗P
d/ RoR 1 year at: (i) $22; (ii) $20; (iii) $18? No dividends.

P’=$22: R = E 1−E 0+ ¿−∫ ¿ =

¿ 17000−15000+0−8 %∗5000
= 10,67%
E0 15000

P’=$20: R = E 1−E 0+ ¿−∫ ¿ =

¿ 15 000−15000+0−8 %∗5000
= -2,67%
E0 15000

P’=$18: R = E 1−E 0+ ¿−∫ ¿ =

¿ 13 000−15000+0−8 %∗5000
= -16%
E0 15000
The relationship between your percentage return and the percentage price change?
 V %∗L
% return = (% price change * ¿−(8 )
E E
For instance:
P’=$22 => % price change = 22-20/20 = 10%
V %∗L 20∗1000 5000
=> % return = (% price change * ¿−(8 ) = 10% * – 8%* = 10,67%
E E 15000 15000
e/ Continue to assume that a year has passed. How low can Intel’s price fall before you get a
margin call?
E 1000∗P−5000−5000∗8 %
MM= = = 25% => P= $7,2
V 1000∗P

Ex 12/118
Answer:
a/
sell short 1.000 share. P=$20. Money = 15.000. No interest. No dividend

Assets Sources
Cash: Proceed= 1000*$20 Value of shares sold = 20.000
Money= 15000 Equity = 15.000
Total: 35.000 35.000

P’=$22:
Assets Sources
Cash = 35.000 Value of shares sold = 22*1000
Equity = 35.000-22.000 = 13000
Total: 35.000 35.000

R = E 1−E 0−¿−∫ ¿ =
¿ 13000−15000−0−0
= -13,33%
E0 15000
P’=$20:
Assets Sources
Cash = 35.000 Value of shares sold = 20*1000
Equity = 35.000-20.000 = 15000
Total: 35.000 35.000

R = E 1−E 0−¿−∫ ¿ =
¿ 15000−15000+0−0
= 0%
E0 15000

P’=$18:
Assets Sources
Cash = 35.000 Value of shares sold = 18*1000
Equity = 35.000-18.000 = 17000
 Total: 35.000 35.000

R = E 1−E 0−¿−∫ ¿ =
¿ 17 000−15000+0−0
= 13,33%
E0 15000

b. If the maintenance margin is 25%, how high can Intel’s price rise before you get a margin
call?

MM = 25% = Cash−V −¿−∫ ¿ =

¿ 35000−P∗1000−0−0
=> P= $28
V P∗1000

c. Redo parts ( a ) and ( b ), year-end dividend of $1/share. The prices in part ( a ) should be
interpreted as ex-dividend, that is, prices after the dividend has been paid.

Assets Sources
Cash: Proceed= 1000*$20 Value of shares sold = 20.000
Money= 15000 Equity = 15.000
Total: 35.000 35.000

P’=$22:
Assets Sources
Cash = 35.000 Value of shares sold = 22*1000
Equity = 35.000 -22.000 = 13000
Total: 35.000 35.000

R = E 1−E 0−¿−∫ ¿ =
¿ 13000−15000−1∗1000−0
= -20%
E0 15000

P’=$20:
Assets Sources
Cash = 35.000 Value of shares sold = 20*1000
Equity = 35.000-20.000 = 15000
Total: 35.000 35.000

R = E 1−E 0−¿−∫ ¿ =
¿ 15000−15000−1∗1000−0
= -6,67%
E0 15000

P’=$18:
Assets Sources
Cash = 35.000 Value of shares sold = 18*1000
Equity = 35.000-18.000 = 17000
Total: 35.000 35.000
R = E 1−E 0−¿−∫ ¿ =
¿ 17 000−15000−1∗1000−0
= 6,67%
E0 15000

MM = 25% = Cash−V −¿−∫ ¿ =

¿ 35000−P∗1000−1∗1000−0
=> P= $27,2
V P∗1000