Consider This.... How to impress your family with your college education b y. Tom Becker Being home for the holidays usually ensures us of the ominous family gatherings complete with crying babies-, hard-of-hearing elders and too many cooks in the kitchen. We college students are fair game for the less intellectually secure who challenge our new-found knowledge. So, when Uncle Henry confronts you with, “If you’re so smart, tell me what QLMSTEP FRIPAY, NOVI^&QPfA Outdoor Killi Cost: $l7O (per person) lncludes:s nites in family style, kitchen-equipped condo and a day ski pass Deadline:Dec 5, $5O deposit (non-refundable) Limit 15 persons SIGN-UP EARLY Come to our meeting Nov 20, W-138, 3:3opm or CONTACT: Rich Morando, 317 Church Hall, 948-6319 John Shenal, 332 Church Hall, 948-6320 '■ /» •A> V you’ve learned at Penn State,” thoughtfully pour more gravy on your stuffing and dazzle him with this bit of financial trivia. Let’s pretend we have $50,000 to play with. We go out and buy XYZ stock at $lOO per. We are able to buy 1000 shares or $lOO,OOO worth because we purchase “on margin”. Margin requirement is the percentage of up-front cash needed to buy Club Offers: ngton Vermont Ski Jan 5-10,.1986 Intercollegiate Ski Fest Week stock. Currently this 50 per cent. Therefore, 50K in cash gets us 100 K in stock. Remind Uncle Henry how margin re quirements were so integral to the stock market crash. He may not remember the actual causes of the times. He’s more likely to remind you, one more an noying time, that what he remembers most about the crash is how he had to walk 10 mile run...PLUS.. Guaranteed Snow! • • • • • • « v •> ••• ’• J•* ••• • ; ••• »i* \• : *, • : •. •,* >.* t , •. *♦.••, • • • * • ...v:.*.,. .•••&••«■ ••• • •••••; annual interest rate, we incur a cost of approximately $l5. This is the interest on $50,000 for one day. Secondly, we have commissioned a broker to buy and sell the stock. Given the size of the transaction, and re cent regulatory action, we can probably negotiate a fee of 1/8 of a point for each share. This translates into $125 for the pur chase and. $125 for the sale. Total cost is $265. Don’t worry , Uncle Henry, we aren’t in any jell trouble yet. rket. - Assume the stock pays a .nng the modest $1 dividend. We receive ,(the divi- our check for $lOOO and pay the Officially bills. The net gain is $735. Not .appened yet. bad for one day’s work. If we . work is done. work one day a week, yearly in .. bought and sold come is overs3B,ooo. If we are Worth of stock thus really enterprising and do this e borrowed $50,000 for on a daily basis, we bring home day. Assuming alO percent almost $200,000. How’s business with you Uncle For your 1nf0. .4 Henry? miles and miles through the snow to school. Getting back to the subject, the key here is timing. We don’t want to buy the stock on just any day. We want to buy the stock five days before the divi dend is paid. The reason for this is simple. Every transaction takes five days to clear so we won’t own the stock until the day of record for dividend payments. The next day, four days before the day of record, we sell the stock on the market. Records will show us selling the stock on the day after the divi dend is issued. Officially nothing has happened yet. However, our work is done. We have bought and sold $lOO,OOO Worth of stock thus far. We borrowed $50,000 for one day. Assuming a 10 percent Capitol Camups’ “Lost and Found” is located in the Business Office, room 114 Olmsted Building. Many items are currently in the lost and found. A new pair of glasses, (eys, jackets, and sweaters are among the items there now. Stop in to check if any of these items are yours. Week Killington mountains 100 trails, 17 lifts, The Capitol Times Thursda 1 November 14, 1985 Page Now comes the realities which you might want to forget to tell Uncle Henry. However, do tell Auntie Em to keep Un cle Henry from mortgaging the farm. Somewhere on Wall Street, there is an obscure person in an obscure office who is the “X -man”. He makes sure that an “X” appears before the name (continued on pg. 6) has
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