23. If joe smith sells short 100 shares of XYZ at $ 35.25 per share and six mont

Question

23. If joe smith sells short 100 shares of XYZ at $ 35.25 per share and six months later is able to purchase the shares at $ 28.50 each, ignoring brokerage fees, he would:

a. Lose a total of $ 675.00

b. earn a total profit of $ 292.50

c. lose a total of $ 425.00

d. earn a profit of $ 675.00

24. market averages and indexed are used to measure:

a. the specific behavior of companies.

b. the general behavior of stock prices.

c. the top and bottom of bear markets.

d. the general behavior of earnings.

25. the basic type of insurance include all the following except:

a. life

b. investment

c. car

d. property and liability

e. health

26. term life insurance provides:

a. protection only

b. protection and a forced saving plan

c. provide an annuity

d. whole life insurance

27. the most expensive type of life insurance is :

a. limited payment

b. protection and a forced savings plan

c. provide an annuity

d. whole life insurance

28. insurance that provides a saving benefit along with protection coverage is also called:

a. whole life

b. whole liability

c. term

d. limited investment

Explanation / Answer

23)

Profit on short ale transaction:

= (Sale price-Purchase price)*Number of shares

= ($35.25-$28.50)*100

= $675

Hence, correct option is d. earn a profit of $ 675.00

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