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When one buys a cash instrument, for example 100 shares of ABC Inc., the payoff is linear(disregarding the impact of dividends). If share are purchased at $50 and the price appreciated to $75, we have ________ on a mark-to-mark basis.
Suggested Answer: A
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31 comments · newest first
HE
Heike
6 months ago
It's all about the gain. We bought low, sold high!
AV
Avery
6 months ago
I feel confused. Why is it not B) Lost $2500?
AN
Annelle
6 months ago
No, it's definitely A. C is just a repeat.
PA
Paulina
6 months ago
But wait, isn't it C) Made $2500 too? Same answer, right?
ON
Oneida
6 months ago
Agreed! 100 shares at $50, then $75. Easy profit.
MA
Marta
7 months ago
I think it's A) Made $2500. Simple math!
JU
Julene
7 months ago
I thought we had to factor in fees or something?
TA
Tawna
7 months ago
C) Made $2500, right on!
AN
Angelyn
8 months ago
Wait, are we sure about that? Seems too easy.
JU
Justine
8 months ago
A) Made $2500 all the way! Where's the challenge in this question?
EL
Elise
8 months ago
D) None of these? Seriously? This is basic math, people.
CL
Claribel
8 months ago
Hmm, I'm going with C) Made $2500. Gotta love these linear payoff questions!
SH
Sherita
8 months ago
C) Made $2500 is the right choice. Straightforward calculation.
MA
Marg
8 months ago
I feel like I might be mixing up the terms here, but if we bought 100 shares at $50 and they went up to $75, wouldn't that mean we lost money? Or is it the opposite?
CA
Candida
9 months ago
This seems similar to a practice question where we calculated gains from stock purchases. I believe the answer is A) Made $2500.
HE
Helga
9 months ago
I'm not entirely sure, but I think if we bought at $50 and sold at $75, it should be a gain, right?
PA
Paul
9 months ago
I remember that the payoff from buying shares is based on the difference between the purchase price and the selling price, so I think we made $2500.
ED
Edison
9 months ago
Wait, I'm not sure about this. The wording of the question is a bit confusing, and I'm not entirely sure what a "cash instrument" is in this context. I'll have to review the material and see if I can figure out the right approach.
SE
Sena
9 months ago
I'm pretty confident about this one. The question is straightforward, and the math is simple. As long as you understand the concept of a linear payoff, you should be able to get this right.
EL
Elke
9 months ago
Okay, I think I got this. The key is that the payoff is linear, disregarding dividends. So the gain would simply be the difference between the purchase price and the selling price, multiplied by the number of shares. That means option C is the correct answer.
MI
Miles
10 months ago
Totally agree, it's a straightforward calculation!
LE
Leigha
10 months ago
A) Made $2500
TH
Theola
10 months ago
Haha, who needs a calculator for this? C) Made $2500, no doubt.
CA
Carri
10 months ago
A) Made $2500 is the correct answer. Easy question!
HO
Howard
11 months ago
Hmm, I'm a bit confused. The question is talking about a "cash instrument" and "mark-to-market basis," which makes me think there might be something more complicated going on here. I'll have to think this through carefully.
SH
Shawna
11 months ago
This seems pretty straightforward. I'd go with option C - made $2500. The question is asking about the payoff on a mark-to-market basis, and if the shares were bought at $50 and appreciated to $75, that's a $25 gain per share on 100 shares, which is $2500.
SE
Sena
5 months ago
No doubt, option C. Great return on investment!
GO
Golda
5 months ago
Yeah, option C is the right choice. Easy calculation!
RO
Rodolfo
5 months ago
I see it as option C too. Clear profit!
LE
Lea
6 months ago
Definitely option C. Simple math!
RE
Renato
10 months ago
I agree, option C makes sense. That's a solid gain!