Week 0 Flashcards
1
Q
Amount to Pay Buy Shares
A
shares * ask price + commission
2
Q
Amount to Receive to Sell Shares
A
shares * bid price - commission
3
Q
Round Trip Transaction Cost
A
Amount to Pay - Amount to Receive
4
Q
At what price does the market maker purchase a security?
A
Bid price
5
Q
Spread
A
shares * (ask - bid)
6
Q
Short Position Obligation on Dividend Ex-Date
A
Responsible for paying dividend owed to the lender of the shorted stock you borrowed
7
Q
What’s greater: present value or future value?
A
PV
8
Q
Price of Zero Coupon Bond
A
P = Face Value / (1 + YTM)^n
9
Q
Arbitrage Definition
A
No net investment of funds
No risk
