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Suppose you short-sell 100 shares of IBM now selling at $200 per share LO 3-4 What is your maximum possible loss What happens to the maximum loss if you simultaneously place a stop-buy order

  1. Suppose you short-sell 100 shares of IBM, now selling at $200 per share. (LO 3-4)

    1. What is your maximum possible loss?

    2. What happens to the maximum loss if you simultaneously place a stop-buy order at $210?

  2. Call one full-service broker and one discount broker and find out the transaction costs of implementing the following strategies: (LO 3-3)

    1. Buying 100 shares of IBM now and selling them six months from now.

    2. Investing an equivalent amount in six-month at-the-money call options on IBM stock now and selling them six months from now.

Jun 18 2020 View more View Less

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