a) You purchase 516 shares of ABC Co. stock on margin at a price of $37. Your broker requires you to deposit $12,300. What is the initial margin requirement in percent? Answer to two decimals. b) You purchased 391 shares of PQR, Inc., stock on 56% margin when the stock was selling for $34.46 a share. The stock is currently selling for $33.54 a share. What is your current equity position (in $)? Answer to two decimals. c) You purchase 639 shares of XYZ Co. stock on margin at a price of $27. Your broker requires you to deposit $6,535. A month later, you sell the stock at a price of $28. What is your return in percent? Answer to two decimals. d) Tom purchased 549 shares of stock on margin for $28.52 a share and sold the shares 3 months later for $28.34 a share. The initial margin requirement was 71 percent and the maintenance margin was 29 percent. The interest rate on the margin loan was 5 percent. He received no dividend income. What was his holding period return (in percent)? Answer to two decimals. e) You  buy 912 shares of stock at a price of $42.66 and an initial margin of 53 percent. What is the maximum percentage decline in the stock before you will receive a margin call if the maintenance margin is 31 percent? Answer to two decimals and include minus sign in answer.

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
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a) You purchase 516 shares of ABC Co. stock on margin at a price of $37. Your broker requires you to deposit $12,300. What is the initial margin requirement in percent? Answer to two decimals.

b) You purchased 391 shares of PQR, Inc., stock on 56% margin when the stock was selling for $34.46 a share. The stock is currently selling for $33.54 a share. What is your current equity position (in $)? Answer to two decimals.

c) You purchase 639 shares of XYZ Co. stock on margin at a price of $27. Your broker requires you to deposit $6,535. A month later, you sell the stock at a price of $28. What is your return in percent? Answer to two decimals.

d) Tom purchased 549 shares of stock on margin for $28.52 a share and sold the shares 3 months later for $28.34 a share. The initial margin requirement was 71 percent and the maintenance margin was 29 percent. The interest rate on the margin loan was 5 percent. He received no dividend income. What was his holding period return (in percent)? Answer to two decimals.

e) You  buy 912 shares of stock at a price of $42.66 and an initial margin of 53 percent. What is the maximum percentage decline in the stock before you will receive a margin call if the maintenance margin is 31 percent? Answer to two decimals and include minus sign in answer.

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