You decide to enter a short-selling strategy with 100 shares. The current price is $70, initial margin 50% and maintenance margin 40%. What price would trigger a maintenance call? 85 75 65 80
Q: Using Table 5.3 as your guide, what is your estimate of the expected annual HPR on the market index…
A: The expected return is an estimate of potential investment profits. It determines how much money you…
Q: One year ago, you purchased 454 shares of stock for $28.98 a share. The stock pays $1.02 a share in…
A: To calculate the total dollar return on your investment, we need to consider both the capital…
Q: In the above table, find the Treasury bond that matures in May 2034. What is your yield to maturity…
A: The yield to maturity refers to the amount of money that can be earned by holding a bond to its…
Q: You have 20 years left for your retirement. You wish to accumulate a sum large enough by that time…
A: P = $1,036.67Explanation:To solve this problem, we can use the future value of an annuity formula.…
Q: A bond with a coupon rate of 8 percent sells at a yield to maturity of 10 percent. If the bond…
A: A bond refers to a debt investment in which an investor loans money to an entity, typically a…
Q: A project that will provde annual cash flows of $3,050 for nine years costs $10,200 today. a. At a…
A: a. NPV6,687.99 b. NPV-218.03c. Discount Rate26.23%Explanation:Step 1: Net Present Value (NPV) is a…
Q: The following table shows the average returns for some of the largest mutual funds commonly found in…
A: Present value refers to the value that are being invested in an asset today that will be available…
Q: A stock has an expected return of 10.99 percent, the risk-free rate is 2.46 percent, and the market…
A: Expected return = 10.99%Risk-free rate = 2.46%Market risk premium = 4.95%To find: Beta of the stock.…
Q: Max Wholesaler borrowed $12,500 on a 9%, 120-day note. After 45 days, Max paid $4,375 on the note.…
A: Interest = Amount Borrowed * Interest rate * Number of days / 360
Q: What is the standard deviation of the rate of return on your client's portfolio? (Round your…
A: The standard deviation of risky investment = 33%Standard deviation of security = 0%
Q: Your company currently has 7% coupon-rate bonds ( coupons are paid semi - annually) with ten years…
A: Coupon rate refers to the percentage of earnings available to the bond holders at equal intervals…
Q: ppose you own 60,000 shares of common stock in a firm with 3 million total shares outstanding. The…
A: Investment value refers to the amount that is being invested by the investors in various shares…
Q: You are purchasing a home for $ 395,000. The loan requires a down payment of 15% of the purchase…
A: A mortgage refers to a covered loan borrowed for the purchase or maintenance of a property with the…
Q: he Haines Corporation shows the following financial data for 20X1 and 20X2: 20X1 20X2 Sales…
A: The objective of the question is to calculate the financial ratios for the years 20X1 and 20X2 and…
Q: MM with Corporate Taxes Companies U and L are identical in every respect except that U is unlevered…
A: As per the MM approach proposition (with taxes), the value of the firm for unlevered firm and the…
Q: Stock Y has a beta of 0.9 and an expected return of 9.46 percent. Stock Z has a beta of 2.1 and an…
A: In this question we are given expected returns and beta of two stocks i.e. Stock Y and Stock Z and…
Q: Your firm is contemplating the purchase of a new $ 535,000 computer-based order entry system. The…
A: Internal rate of return(IRR) is the discount rate that makes NPV of investment zero. IRR can be…
Q: Over the past five years, a stock returned -2.73 percent, 14.66 percent, 15.19 percent, 3.43…
A: The question deals with the concept of variance, a statistical measure used in finance to quantify…
Q: Dizzy Inc. wishes to issue new bonds but is uncertain how the market would set the yield to…
A: Compound = Semiannually = 2Time = t = 20 * 2 = 40Semiannually Coupon Rate = c = 3.5%Face Value = fv…
Q: eEgg is considering the purchase of a new distributed network computer system to help handle its…
A: Net present value refers to the method of capital budgeting used for evaluating the viability of the…
Q: efficient of variation. Do not round intermediate calculations. Round your answers to two decimal…
A: The market risk premium, often referred to simply as the "risk premium," is a key concept in finance…
Q: Write on Exploring the Efficiency of Financial Markets in the Caribbean: An Analysis of…
A: Exploring the Efficiency of Financial Markets in the Caribbean: An Analysis of Evidence Supporting…
Q: U.S. Steel is considering a plant expansion to produce austenitic, precipitation hardened,duplex,…
A: TVM refers to the capacity of money to earn interest because money earned earlier is considered more…
Q: Stock Investment Stock's Beta Coefficient A $160 million 0.7 B 120 million 1.5 C 80 million 2.2 D E…
A: Risk-free rate = 4%StockInvestmentStock's beta…
Q: Hubrey Home Inc. is considering a new three-year expansion project that requires an initial fixed…
A: OCF1 = $ 1,449,850.00 OCF2= $ 1,618,900.00 OCF 3= $ 1,495,735.00 Please see solution in the…
Q: Tommy Boy is planning to buy a house in four years. He is looking to invest $25,400 today in an…
A: To compute the future value of Tommy Boy's investment, we can use the formula for compound…
Q: Problem 7.4 Kapinsky Capital (A) Christoph Hoffeman trades currency for Kapinsky Capital of Geneva.…
A: Currency fluctuations refer to shifts in currency values influenced by factors such as indicators…
Q: For each of the following annuities, calculate the annual cash flow: Note: Do not round intermediate…
A: An annuity is a series of periodic payments paid/received in exchange for a lump sum payment. It is…
Q: 1. The interest rate is 8.7% p.a. effective and the rate of inflation is 1% p.a. Compute the real…
A: answer is in the explanation sectionExplanation:1. Real Rate of Interest = Nominal Interest Rate -…
Q: The current zero-coupon yield curve of semi-annually compounded rates for risk- free bonds is as…
A: The objective of the question is to calculate the price of a semi-annual coupon bond given the yield…
Q: The market - required rate of return is 14% and the coupon rate of a 10 - year bond is 10 %. the par…
A: The objective of the question is to determine whether a bond will sell at a discount given the…
Q: Consider two investments A and B with the following sequences of cash flows: Net Cash Flow n Project…
A: The objective of the question is to calculate the Internal Rate of Return (IRR) for two investment…
Q: name: cashflow6.dwg $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 0 B = ? F = ? 50…
A: The present value refers to the discounted future cash flow at the interest rate for the given…
Q: Complete the missing information in the table below. Assume that all bonc Do not use negative signs…
A: The time value of money holds that a dollar now has a higher value than it does tomorrow. The reason…
Q: A cart of groceries today costs about $132 and decreases 2.4% a year due to deflation. Create a…
A: Future value is the value of a sum of money at a future time point. Deflation is a phenomenon in…
Q: Problem 6-6 (Algo) Consider the following table: Scenario Probability Stock Fund Rate of Return Bond…
A: An investor would wish to analyze how two investment's returns move in coordination with each other…
Q: Projected Income ☐ Savings Goal ☐ Monthly Budget ☐ Bank Accounts and Lines of Credit First/Small…
A: Making a one-year financial plan is a calculated move toward managing your money so that you can…
Q: Duo Corporation is evaluating a project with the following cash flows: Year Cash Flow -$ 29,400…
A: MIRR:The Modified Internal Rate of Return (MIRR) is a financial metric used to evaluate the…
Q: Don't use chat , I will 5 upvotes
A: The objective of the question is to calculate the future value of daily payments of $4,710 over a…
Q: Dominic owns a two-stock portfolio that invests in Celestial Crane Cosmetics Company (CCC) and…
A: The expected return of the portfolio can be found by adding up the value using the percentage of…
Q: Intel recently issued semi-annual, 4.8% coupon bonds. The bond will mature in 3 years. The current…
A: Bond price = whereFV = Face value or par value=$1000C = Periodic coupon = semi annual coupon =$1000…
Q: An analyst believes that inflation is going to increase by 2.0% over the next year, while the market…
A: The Capital Asset Pricing Model (CAPM) is used to determine the expected return on an investment…
Q: For each of the following annuities, calculate the future value. Note: Do not round intermediate…
A: Annual paymentYearsInterest Rate$1,520109%$6,5403410%$3,64097%$8,3303611%
Q: Do not use chatgpt.20 dislike
A: Sensitivity Analysis for McGilla Golf's New ClubsWe can perform a sensitivity analysis to understand…
Q: The following table shows the prices of a sample of Treasury bonds, all of which have coupon rates…
A: The objective of the question is to calculate the interest rates for different maturity periods and…
Q: sume that the CAPM is a good description of stock price returns. The market expected return is 8%…
A: Expected market return = 8%Risk free rate = 3.5%Beta Green Leaf = 1.50Beta NatSam = 1.80Beta HanBel…
Q: Omega Enterprises issued 10 year 9% preference shares four years ago. The preference shares which…
A: Shares of stock refer to the financial instruments that are issued to raise capital from the public.…
Q: Sunshine Corp hired a new CFO and changed firm's policy from zero leverage to some leverage. They…
A: WACC can be referred as the average capital cost based on weights assigned to specific source of…
Q: As of November 1, 1999, the exchange rate between the Brazilian real and U.S. dollar is R$1.99 per…
A: Current spot rate=R$1.99/$Inflation Brazil=20%US inflation=2.7%Find out one year forward rate.
Q: Q3. A Treasury Note has a coupon rate of 4% (paid semi-annually) and a par value of $100. There are…
A: A Treasury note is a type of government bond issued by the United States Department of the Treasury.…
Unlock instant AI solutions
Tap the button
to generate a solution
Click the button to generate
a solution
- Assume an initial margin requirement of 50% and a maintenance margin of 30%. An investor buys 100 shares of stock on margin at $60 per share. The price of the stock subsequently drops to $50. a. What is the actual margin at $50? b. If the price declines to $49, is there a margin call? c. Assume that the price declines to $45. What is the amount of the margin call? At $35?he initial margin requirement on a stock purchase is 50% and the maintenance margin is 30%. You fully use the margin allowed to purchase 100 shares of XYZ at $25. If the price drop to the margin-call point, your broker will sell just enough of your shares to restore the initial margin requirement. How many shares will your broker sell Ignore interest on the loan.) Multiple Choice 334 400 462 667The current market price for ABC is $70 per share. Initialmargin is 50%, maintenance margin is 35% and there is no margininterest. 1) You believe the stock price will decrease over the nextyear and wish to trade exactly one round lot. What trade should youmake ? How much margin would you have to post to youraccount ? At what price would you receive a margin call? 2) Suppose you are correct and the stock falls to $64 pershare at the end of the year. What is your percentage return onequity for this trade
- You shorted a stock at $50 a share. If the maintenance margin is 35%, at what price level will you get a margin call? Group of answer choices A) $55.55 B) $57.50 C) $62.55 D) $60You purchase 500 shares of Compucon for $120 per share using a margin account. This transaction requires a 45% percent margin. a. What is the initial margin position? b. Assume the price of Compucon declines to $90 per share. If the minimum maintenance margin requirement is 25% will you receive a margin call? Why? Why not? Explain. c. What is your rate of return? d. Calculate the price that will trigger a margin call.An investor short sells 100 shares of a stock for £50 per share. The initial margin is 50%. With a maintenance margin of 30%, what is the stock price at which there will be a margin call? If rather than short selling the shares you buy them on margin, explain how the definition of the margin would change.
- You are bearish on Telecom and decide to sell short 100 shares at the current market price of $47 per share. Required: a. How much in cash or securities must you put into your brokerage account if the broker’s initial margin requirement is 50% of the value of the short position? b. How high can the price of the stock go before you get a margin call if the maintenance margin is 30% of the value of the short position?Assuming you have a margin account with a leverage ratio of 1.76and you wish to sell short a stock currently priced at $25 per share, how many shares can you sell short if you intend to use $9200 of your own equity to initiate the short sale? suppose the maintenance margin is 0.28 Calculate the number of shares what is the margin call priceYou are bearish on Telecom and decide to sell short 100 shares at the current market price of $49 per share. a. How much in cash or securities must you put into your brokerage account if the broker's initial margin requirement is 50% of the value of the short position? Initial margin b. How high can the price of the stock go before you get a margin call if the maintenance margin is 30% of the value of the short position? (Round your answer to 2 decimal places.) Stock price reaches
- You purchased XYZ stock at $50 per share. The stock is currently selling at $65. Your gains could be protected by placing a _________. Group of answer choices limit buy order limit sell order market order stop-loss orderYou are bearish on Telecom and decide to sell short 100 shares at the current market price of $50 per share. Required:a. How much in cash or securities must you put into your brokerage account if the broker’s initial margin requirement is 50% of the value of the short position? b. How high can the price of the stock go before you get a margin call if the maintenance margin is 30% of the value of the short position? (Round your answer to 2 decimal places.)The current price of a stock is $20 per share. You have $10,000 to invest. You borrow an additional $20,000 from your broker and invest $30,000 in the stock. If the maintenance margin is 30 percent, at what price will a margin call first occur? O A. $19.05 O B. $17.86 O C. $14.28