The sample space gives us the possible outcomes for a stock's return rate. The return rate for a stock can be either positive or negative but cannot be less than -100%.

The new limit order becomes a standing limit order and thus makes a new market. The market for the stock is now "$30.25 bid, offered at 30.50". The spread is narrowed than before.

It is possible that the stock price reaches its maximum or minimum value during the period from date of purchase to expiration, not just on the expiration date. Only an American option can take this kind of opportunity to make profits by being exercised during this period. So it is more valuable.

If it is unclear whether the information will affect the price of a security and to what extent, information may not be considered material.

Original equity = 40% of (2,500 x $70) = (.40)($175,000) = $70,000 Original Loan = 60% of
(2,500 x $70) = (.60)($175,000) = $105,000 Interest on loan = 1/2 of 8% of $105,000 = (1/2)($8,400) =
$ 4,200 C l $105 000 $4 200 $109 200 Current loan = $105,000 + $4,200 = $109,200 Current Equity =
(QP-L) = (2,500 x $71 - $109,200) = $177,500 - $109,200 = $68,300 $ return = $68,300 - $70,000 = -
$ 1,700 (Rate of return = -1,700/70,000= -2.43%)