Frank purchased 100 shares of Fox Company stock for $100.75 per share. To purchase this stock Frank used a margin account with a 60% initial margin and a maintenance margin equal to 35%. Below what price must the stock decline for Frank to receive a margin call
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Frank purchased 100 shares of Fox Company stock for $100.75 per share. To purchase this stock Frank used a margin account with a 60% initial margin and a maintenance margin equal to 35%. Below what price must the stock decline for Frank to receive a margin call
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- On March 1st, Frank opens a brokerage account and sell shorts 300 shares of Doggie Treats Inc. at $50 per share. The initial margin requirement is 50%. a. What is the margin in Frank's account when he first sells the stock? b. The stock pays a cash dividend of $1 on March 28th, and the share price falls to $40 per share by the end of March, what is the remaining equity in his account? C. What is the monthly rate of retur on his margined position?On March 1st, Frank opens a brokerage account and sell shorts 200 shares of Doggie Treats Inc. at $60 per share. The initial margin requirement is 50%. a. What is the margin in Frank’s account when he first sells the stock? b. The stock pays a cash dividend of $1 on March 28th, and the share price falls to $50 per share by the end of March, what is the remaining equity in his account? c. What is the monthly rate of return on his margined position?Accounting hassan has recently opened a margin account. He bought 200 shares of stock in the Abington Corporation at $80 per share by paying 70 percent initial margin for the stock, and shortly thereafter received a margin call from his broker. The broker explained that hassan's new account did not meet the maintenance margin requirements of 30 percent because the price of Abington stock fell right after hassan bought it. What percentage decline must Abington experience for hassan to violate the 30 percent maintenance margin requirement?
- Kathy Snow wishes to purchase shares of Countdown Computing, Inc. The company's board of directors has declared a cash dividend of $0.80 to be paid to holders of record on Wednesday, May 12. a. What is the last day that Kathy can purchase the stock (trade date) and still receive the dividend? b. What day does this stock begin trading ex dividend? c. What change, if any, would you expect in the price per share when the stock begins trading on the ex dividend day? d. If Kathy held the stock for less than one quarter and then sold it for $39 per share, would she achieve a higher investment return by (1) buying the stock prior to the ex dividend date at $35 per share and collecting the $0.80 dividend or (2) buying it on the ex dividend date at $34.20 per share but not receiving the dividend?Mary purchased 500 shares at the price of $41 using her margin account and a 50% initial margin. Since then the stock price declined to $29 per share. How much money does Mary need to deposit into her margin account to comply with the maintenance margin requirement of 35%? $1,075 $1,325 $825 $560A customer sells short 100 shares of DEF stock at $63 and sells 1 DEF Oct 60 Put @ $6. The market rises to $68 and the put expires. The customer buys the stock in the market covering her short stock position. The gain or loss is: A $100 gain B $100 loss C $300 gain D $300 loss
- Daniella purchased 200 shares of LogicBased stock on margin at a price of $53 a share. The initial margin requirement is 70% and the maintenance margin is 40%. What is the lowest the stock price can go before Daniella receives a margin call? Multiple Choice $25.30 $26.0 $27.85 $28.49 $29.37Samantha purchased 845 shares of Apple for $172,540 in a margin account and posted initial margin of 45%. His broker, Ritz, stated the maintenance margin requirement is 25%. The price of Apple, below which Samantha would get a margin call, is closest to A. $100 B. $150 C. $200 D. $250An investor short sells 250 shares of a stock for $43 per share. The initial margin is 60%. Ignoring transaction costs, how much will be in the investor’s account after this transaction if this is the only transaction the investor has undertaken and the investor has deposited only the required amount?
- A customer buys 100 ABC at $63 per share and buys 1 ABC Jan 60 Put @ $4. The stock subsequently falls to $52 and the customer exercises the put selling his stock. The customer has a: A $300 loss B $400 loss C $700 loss D $1,100 lossLauren has a margin account and deposits $49,994 into it. Assume the prevailing margin requirement is 40%, interest and commisions are ignored, and the Gentry Wine Corporation is selling at $35 per share. a) How many shares can Lauren purchase using the maximum allowable margin? b) What is Lauren's profit (loss) if the price of Gentry's stock 1) rises to $45 and Lauren sells the stock? 2) falls to $25 and Lauren sells the stock? c) If the maintenance margin is 30% to what price can Gentry Wine fall before Lauren will receive a margin call?1) Lisa has a margin account and deposits $2500,000 into it. Assume that the prevailing margin requirement is 50%, interest and commissions are ignored and and XYZ Corp. is selling for $44 a share. a.) How many shares can Lisa purchase using the maximum allowable margin? b.) What is Lisa's profit or loss is XYZ Corp.'s stock i.) Rises to $59 and Lisa sells the stock? ii.) Falls to $32 a share and sells the stock? c.) If the maintenance margin is 30%, what price can the stock fall to before Lisa receives a margin call? 1262 20