Question

How Can an Investor Profit in the Stock Market?

How Can an Investor Profit in the Stock Market?

Homework Answers

Answer #1

An investor can profit in the stock market in the following ways:

1. He can influence the market by bulk purchase or sale of goods.

2. He can purchase or sell on different indexes such as NSE and BSE, therefore different price quotation, earning arbitrage.

3. Due to the availability of large funds he can diversify the risk.

4. He is a big player can influence the market and have perfect information.

5. He can make use of the market irregularities and ups and down in the economy.

6. He even has an option to invest in currencies, commodities, futures, forwards and swaps thereby safeguarding the investment.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
As an investor in the financial market, you have two situations that you can make profit...
As an investor in the financial market, you have two situations that you can make profit out of. Currently, the stock price is $30 per share. Identify the best strategy to follow for each case. First:When you expect that the price of BETA will decrease in 30 days to $25. The broker’s initial margin requirement is 60% of the value of the position. - What will be your strategy and your position? - How much will you lose or gain...
An investor sells a European call on a share for $4. The stock price is $47...
An investor sells a European call on a share for $4. The stock price is $47 and the strike price is $50. Under what circumstances does the investor make a profit? Under what circumstances will the option be exercised? Explain how investors profit, according to the variation of the stock price at the maturity of the option. (You can explain by writing a simple formula of the profit, where X is the stock price at maturity.
An investor who invests in the stock market has become doubtful about the stock market as...
An investor who invests in the stock market has become doubtful about the stock market as a good investment. In some cases, it would have been better for him to have his money in a bank than in the stock market. During the next year, he must decide whether to invest OMR10,000 in the stock market or in a fixed deposit (FD) in a bank at an interest rate of 9%. If the market is good, he believes that he...
Suppose that a house can be rented in an uncontrolled market for a profit of $30,000...
Suppose that a house can be rented in an uncontrolled market for a profit of $30,000 this period and $30,000 next period. (There are only two periods).       (a). If the market interest rate is 10 percent, what is the most that one would expect a housing investor to pay for this rental property. (8 points). (b). Suppose the investor buys the rental property at the price determined in (a), and that immediately after making the purchase, a local government...
7. How can an investor lose money on a stock while making money on a bond...
7. How can an investor lose money on a stock while making money on a bond investment if there is a reward for bearing risk? Aren't stocks riskier than bonds? (3 pts)
An investor wants to minimize market risk on a $50 million stock portfolio by using futures...
An investor wants to minimize market risk on a $50 million stock portfolio by using futures for hedging. The portfolio’s beta with respect to the S&P 500 equity index is 1.25. The current index futures quote is 2,875 and each contract is for delivery of $250 times the index. a. What futures position should the investor open to execute the hedge? Long or short? b. How many index futures contracts does the investor need to use to minimize market risk?...
When a new issue of stock is brought to market, it is the marginal investor who...
When a new issue of stock is brought to market, it is the marginal investor who determines the price at which the stock will trade. True False
What would be the profit or loss per share of stock to an investor who bought...
What would be the profit or loss per share of stock to an investor who bought the October maturity IBM call option with exercise price $100, if the stock price at the expiration of the option is $104? What about a purchaser of the put option with the same exercise price and maturity?
Assume yourself to be a 60-year-old investor who is willing to invest in stock market. You...
Assume yourself to be a 60-year-old investor who is willing to invest in stock market. You can either invest in common or preferred stock of various companies listed in stock exchange. Based on characteristics of both stocks, which stock would you choose and why?
An investor holds shares of Bank of Montreal. The Canadian stock market can be explained by...
An investor holds shares of Bank of Montreal. The Canadian stock market can be explained by three sources of systematic risk: short-term interest rates (I), the rate of inflation (P), and industrial production (Y). Short-term interest rates have an associated risk premium of 4%, inflation has an associated risk premium of 4% and industrial production has an associated risk premium of 1%. Each systematic factor has a mean value of zero, so that non-zero factor values represent unexpected surprises from...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT