a. What is the remaining margin in the account? Remaining margin b-1. What is the margin on the short position? (Round your answer to 2 decimal places.) Short margin b-2. If the maintenance margin requirement is 30%, will Old Economy receive a margin call? O Yes O No % c. What is the rate of return on the investment? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.) Rate of return %

a. What is the remaining margin in the account? Remaining margin b-1. What is the margin on the short position? (Round your answer to 2 decimal places.) Short margin b-2. If the maintenance margin requirement is 30%, will Old Economy receive a margin call? O Yes O No % c. What is the rate of return on the investment? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.) Rate of return %

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Old Economy Traders opened an account to short sell 1,000 shares of Internet Dreams from the previous problem. The initial margin requirement was 50%. (The margin account pays no interest.) A year later, the price of Internet Dreams has risen from $40 to $50, and the stock has paid : a dividend of $2 per share.a. What is the remaining margin in the account?b. If the maintenance margin requirement is 30%, will Old Economy receive a margin call?c. What is the rate of return on the investment?
Old Economy Traders opened an account to short sell 1,500 shares of Internet Dreams at $50 per share. The initial margin requirement was 50%. (The margin account pays no interest.) A year later, the price of Internet Dreams has risen from $50 to $65, and the stock has paid a dividend of $1.50 per share. a. What is the remaining margin in the account? (Round your answer to the nearest whole number.) Remaining margin b. If the maintenance margin requirement is 30%, will Old Economy receive a margin call? Yes O No c. What is the rate of return on the investment? (Round your answer to 2 decimal places. Negative value should be indicated by a minus sign.) Rate of return %
You've borrowed $27,392 on margin to buy shares in bxnay, which is now selling at $42.8 per share. You invest 1280 shares. Your account starts at the initial margin requirement of 50% The maintenance margin is 35%. Two days later, the stock price changes to $49 per share. a. Will you receive a margin call? O Yes ONo b. At what price will you receive a margin cal? (Round your answer to 2 decimel pleces.)
Old Economy Traders opened an account to short sell 1,000 shares of Internet Dreams at $50 per share. The initial margin requirement was 50% (the margin account pays no interest.) A year later, the price of Internet Dreams has risen from $50 to $55, and the stock has paid a dividend of $1 per share. What is the remaining margin in the account? $19.000 $15,000 $12,000 $18,000
Old Economy Traders opened an account to short-sell 1,000 shares of Internet Dreams at $120 per share. The initial margin requirement was 50%. (The margin account pays no interest.) A year later, the price of Internet Dreams has risen from $120 to $131.20, and the stock has paid a dividend of $20.00 per share. a. What is the remaining margin in the account? Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
a. An initial margin requirement is 54% and maintenance margin of 48%. An investor buys GPH, 9500 shares of stock on margin at Tk. 86.50 per share. The price of the stock subsequently drops to tk. 55.70. a. Find the amount investor has to deposit for initiating the transaction. b. What is the actual margin at tk. 54.25 share price is the account restricted? c. If the price rises to tk. 61.90, is there a margin call? d. Show the amount of margin call is required to bring back account into operational at price of tk. 63.10?
Rob Thomas Traders opened an account to short-sell 1,000 shares of WeWork at $60. The initial margin requirement was 50%. (The margin account pays no interest.) A year later, the price of WeWork has risen from $60 to $76, and the stock has paid a dividend of $2.75 per share. a. What is the remaining margin in the account? b. If the maintenance margin requirement is 35%, will Rob Thomas Traders recieve a margin call?
You've borrowed $27,950 on margin to buy shares in Ixnay, which is now selling at $43.0 per share. You invest 1,300 shares. Your account starts at the initial margin requirement of 50%. The maintenance margin is 35%, Two days later, the stock price changes to $50 per share. Required: a. Will you receive a margin call? O Yes O No b. At what price will you receive a margin call? (Round your answer to 2 decimal places.) Stock price
An initial margin required is 48% and maintenance of 55%. An investor buys GPH 9500 shares of stock of margin at TK 95.55 per share. The price of the stock subsequently drops to TK 47.60. a. Find the amount investor has to deposit for initiating the transaction. b.What is the actual margin at tk 56.56 share price is the account restricted? c.Show the amount of margin call is required to bring back account into operational at price of tk.53.90?
c. You purchased 100 shares of common stock on margin at $55 per share. Assume that the initial margin is 60%, with the maintenance margin of 35%. If the price moves to $40 per share, what would be the remaining equity margin in your account? Calculate the price at which there will be a margin call?
Suppose that Xtel currently is selling at $46 per share. You buy 250 shares using $8,000 of your own money, borrowing the remainder of the purchase price from your broker. The rate on the margin loan is 6%. Required: a. What is the percentage increase in the net worth of your brokerage account if the price of Xtel immediately changes to: (i) $48.76; (ii) $46; (iii) $43.24? What is the relationship between your percentage return and the percentage change in the price of Xtel? b. If the maintenance margin is 25%, how low can Xtel's price fall before you get a margin call? c. How would your answer to (b) change if you had financed the initial purchase with only $5,750 of your own money? d. What is the rate of return on your margined position (assuming again that you invest $8,000 of your own money) if Xtel is selling after 1 year at: (i) $48.76; (ii) $46; (iii) $43.24? What is the relationship between your percentage return and the percentage change in the price of Xtel? Assume that Xtel…
Suppose that XTel currently is selling at $40 per share. You buy 500 shares using $15,000 of your own money, borrowing the remainder of the purchase price from your broker. The rate on the margin loan is 8%. Required:a. What is the percentage increase in the net worth of your brokerage account if the price of XTel immediately changes to (i) $44; (ii) $40; (iii) $36? (Leave no cells blank - be certain to enter "0" wherever required. Negative values should be indicated by a minus sign. Round your answers to 2 decimal places.) b. If the maintenance margin is 25%, how low can XTel’s price fall before you get a margin call? (Round your answer to 2 decimal places.) c. How would your answer to requirement b change if you had financed the initial purchase with only $10,000 of your own money? (Round your answer to 2 decimal places.) d. What is the rate of return on your margined position (assuming again that you invest $15,000 of your own money) if XTel is selling after one year…

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