Dée Trader opens a brokerage account and purchases 100 shares of Internet Dreams at $58 per share. She borrows $2,200 from her broker to help pay for the purchase. The interest rate on the loan is 12%.   Required: a. What is the margin in Dée’s account when she first purchases the stock?   b. If the share price falls to $48 per share by the end of the year, what is the remaining margin in her account?   c. If the maintenance margin requirement is 30%, will she receive a margin call? multiple choice Yes No d. What is the rate of return on her investment? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)

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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Dée Trader opens a brokerage account and purchases 100 shares of Internet Dreams at $58 per share. She borrows $2,200 from her broker to help pay for the purchase. The interest rate on the loan is 12%.
 

Required:
a. What is the margin in Dée’s account when she first purchases the stock?

 


b. If the share price falls to $48 per share by the end of the year, what is the remaining margin in her account?

 


c. If the maintenance margin requirement is 30%, will she receive a margin call?

multiple choice

  • Yes
  • No


d. What is the rate of return on her investment? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)

 
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