Classify the Following Trading Activities as Either a Position Trade,a

question 30

Essay

Classify the following trading activities as either a position trade,a pure arbitrage trade,or a risk arbitrage trade.
I. Buy Intel at $120 and hold it for six months in hopes of a price rise.
II. Buy GE on the NYSE and immediately sell it at a higher price on the Pacific Exchange.
III. Short sell Dell in anticipation of a poor quarterly earnings report.

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Definitions:

Gross Sales

The total sales revenue from goods or services before any deductions for returns or discounts.

Direct Expense

Expenses that can be directly attributed to the production of specific goods or services, such as materials and labor.

Sales Salaries

Compensation paid to employees directly involved in the sales function of a business, typically comprising both base salary and commissions.

Administrative Expense

Expenses related to the general operation of a business, including salaries of executive personnel, accounting and legal services, and insurance.