1.You buy 100 shares of Microsoft for $26.50, and a week later one of the company’s most powerful Executives is fired for “cooking the books”. The stock price nose-dives to $23.00. What do you do? Explain in detail.
A:buy puts or get out of the position as soon as possible.it could be another enron whose stock price falls to zero.the risk and uncertainty is too high.plus,many institutional investors such as mutual funds will sell it without any hesitate when these kind of things happen,still have plenty room to decline.
2.You buy 100 shares of Intel for $29.00. Three days later it drops down to $27.50. What do you do? Explain in detail.
A:find out the reason.
3.What luck! A friend has sold you a plane ticket to New York City for only a hundred bucks! But now you are stuck in traffic on the way to the airport, and to make it to your plane in time will involve some pretty reckless driving, and even then you’re not sure you will make it. What do you do? Explain in detail.
A:just forget about the tickets.a hundered bucks can't justify the risk you take when you are reckless driving.
4.You buy a CD, take it home and just as you pull it out of the case, you drop it and it gets scratched and won’t play. What do you do? Explain in detail.
A:do nothing .
5.You have been put in charge of purchasing computers for your company’s shipping department. You find out that you can get the computers from a guy for much less than through your regular vendor. Without authorization, you buy the computers. When they arrive, they are defective, and the guy who sold them to you has skipped town. What do you do? Explain in detail.
A:tell boss the truth or buy new ones with my own money.
6.You purchased a house 5 years ago for $150,000. Today the house is worth around $250,000. Your neighbor puts his up for sale and it is sold in 3 days to the Hell’s Angels who will make a club house out of it. What are you going to do? Explain in detail.
A:sell the house and find a new one.
7.You purchase a stock at $19.00 on a “tip”. You promise yourself that you will sell when the price gets to $20. Before you can call your broker, the stock climbs to $20.10. What do you do? Explain in detail.
A:place a stop-loss order at 20.
8.You purchase a stock at $22.00. You put a self-imposed stop loss on it at $20.00. Before you can call your broker, the stock crashes to $19.00, but slowly climbs back up and sits at $20.10. What do you do? Explain in detail.
A:place a stop-loss order at break even.