Chapter 1: Question 7 (page 79)
Why have average trade sizes declined in recent years?
Due to the introduction of electronic trading that permits stocks to be broken into smaller units.
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Turn back to Figure 2.9 and look at the Apple options. Suppose you buy an August expiration call option with exercise price \(355.
a. If the stock price in August is \)367, will you exercise your call? What are the profit and rate of return on your position?
b. What if you had bought the August call with exercise price \(360?
c. What if you had bought an August put with exercise price \)355?
What are the differences between equity and fixed-income securities?
Why are corporations more apt to hold preferred stock than are other potential investors?
What are the advantages and disadvantages of exchange-traded funds versus mutual funds?
Balanced funds and asset allocation funds invest in both the stock and bond markets. What is the difference between these types of funds?
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