Question

40) You purchased 300 shares of a non-dividend paying stock for $25.2 a share 6 months ago. Today, you sold those shares for $36.1 a share. What was your percentage annualized rate of return on this investment?

41) You purchased 300 shares of SLG, Inc. stock at a price of $43.3 a share. You then purchased put options on your shares with a strike price of $40.00 and an option premium of $1.8. At expiration, the stock was selling for $47.7 a share. You sold your shares on the option expiration date. What is your net profit or loss your transactions related to SLG, Inc. stock?

Answer #1

Purchase price of share = 25.20

Selling Price of share = 36.1

Annualized return = (Sales price- Purchase price) / Purchase price
* 12/ months = ((36.1 - 25.2)/25.2 * 12/6 = 86.51%

41)

Cost of share = 43.30

No of shares = 300

Total investment = 300 * 43.30 = 12990

Option Premium = 1.8

Total Invetment on put options = 300 * 1.8 = 540

Total Investment = 12990 + 540 = 13530

On or before expration date if you sold the option you will not be
in the money and the the share will be sold at strike price

So Sales of stock = Strike price * no of shares = 40 * 300 =
12000

Loss from the transaction = 12000 - 13530 = -1530

Loss in the transaction = 1530.

Best of Luck. God Bless

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