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at the market opening, a customer purchases 200 shares of an S&P 500 inverse etf (-1x) at $50 per share. At the end of that day, the s&P 500 index declines by 10%. The next day the index partially recovers and closes up 5%. What will be the market value of the 200 share position?

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sqdancefan

Answer:

  $9,450

Step-by-step explanation:

You want to know the market value of 200 shares at $50 per share after a decrease of 10% and an increase of 5%.

Value multiplier

For some fractional change p, the value v becomes ...

  v' = v + pv = v(1 +p)

Successive changes

Each change multiplies the value as shown above. The value of the 200 shares of stock after the two days of trading will be ...

  $50×200×(1 -0.10)×(1 +0.05) ≈ $9,450

The market value will be $9,450.

The required cost or the market value of the 200-share position is $47.25.


As in the given question, at the market opening, a customer purchases 200 shares of an S&P 500 inverse ETF (-1x) at $50 per share. At the end of that day, the s&P 500 index declined by 10%. The next day the index partially recovers and closes up 5%.
To determine the market value of the 200 share position.

What is arithmetic?

In mathematics, it deals with numbers of operations according to the statements. There are four major arithmetic operators, addition, subtraction, multiplication and division,

Here,
Cost of share is declined by 10%
Cost of the share = 50 * 0.1 = 5
Cost of the share = 50 - 5 = $45

Again the cost of the share is increased by 5%
cost = 45 * 0.05 = $47.25

Thus, the required cost or the market value of the 200-share position is $47.25.

Learn more about arithmetic here:

brainly.com/question/14753192

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