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Under what conditions might profit maximization not lead to stock price maximization?

Under what conditions might profit maximization not lead to stock price maximization?"


How can one profit from a decrease in the price of a stock without actually owning the stock by buying put options?

By purchasing put options, an investor can profit from a decrease in the price of a stock without actually owning the stock. Put options give the holder the right to sell the stock at a specified price, allowing them to make a profit if the stock price falls below that price. This strategy is known as "shorting" the stock through options trading.


Why do you buy stock?

To invest in the businesses success both to improve the businesses output and to receive a share of the profit. Some brokers buy stock purely to sell for profit.


Is it possible to profit from both selling and buying the same stock?

Yes, it is possible to profit from both selling and buying the same stock through a trading strategy called "buying low and selling high." This involves purchasing the stock at a lower price and then selling it at a higher price to make a profit.


How can I profit from a decrease in the price of a stock by selling to open a put option?

You can profit from a decrease in the price of a stock by selling to open a put option because you receive a premium upfront for agreeing to buy the stock at a specific price in the future. If the stock price decreases below the agreed-upon price, you can buy the stock at the lower market price and then sell it at the higher agreed-upon price, making a profit.

Related Questions

What is nonprofit stock?

There is no such thing as non profit stock. Stock implies ownership in a for profit company.


Opening stock minus closing stock?

profit or loss


How does opening and closing stock affect gross profit?

Opening and closing stock directly impact gross profit by influencing the cost of goods sold (COGS). The formula for COGS is: Opening Stock + Purchases - Closing Stock. If opening stock is high or closing stock is low, COGS increases, reducing gross profit. Conversely, low opening stock or high closing stock decreases COGS, thereby increasing gross profit.


Does one have to pay fees to check stock data on the NDTV Profit website?

An individual does not have to pay fees to check stock data on the NDTV profit. NDTV profit has stock given to be viewed at for free from business finance to stocks.


If closing stock increases how will it effect net profit?

net profit will increase


What is a stock investor?

A person who invests in the stock marketin hopes of making profit


How do you get the closing stock in trading profit and loss when not given?

How do I find the opening stock when given the closing stock


What is the effect of closing stock on net profit?

A business remaining stock at the end of an accounting period is known as closing stock. It may include the finished goods, raw material and work in process and it is also deducted from the periods costs in the balance sheet. however sales in the trading a/c do have an effect on the gross profit and hence in the profit and loss a/c for the net profit. An increase or decrease in closing stock will have an effect on the net profit..if closing stock increase the gross profit will increse and vice versa. As the gross profit will increase the firm will able to deduct more expenses from it and hence the remaining will be the net profit.( increase)


What will be the effect of decrease in closing stock on gross profit?

i think Gross profit Will decrease


Why would stock be expensed in the profit and loss account?

Stock would be expenses to the profit & loss account (P&L) when: * It was used, or * It had no economic value


How will you find closing stock in trading and profit and loss account?

GROSS PROFIT = SALES - [OPENING STOCK + PURCHASES + DIRECT EXPENSES - CLOSING STOCK]... substitute if u have all the other values


Under what conditions might profit maximization not lead to stock price maximization?

Under what conditions might profit maximization not lead to stock price maximization?"