Rob has deposited K40,000 in his margin account and he wants to use the money to buy shares of the ABC company. The initial margin requirement is 40% and ABC’s stock price is currently K50. Ignore taxes, commissions and interest on the amount borrowed How many shares of ABC can Rob buy from his

Rob has deposited K40,000 in his margin account and he wants to use the money to buy shares of the ABC company. The initial margin requirement is 40% and ABC’s stock price is currently K50. Ignore taxes, commissions and interest on the amount borrowed How many shares of ABC can Rob buy from his

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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am. 105.
You sell short 400 shares of MIZ which are currently selling at $ 15 per share . You post the 30 % margin required on the short sale . If you earn no interest on the funds in your margin account what will be your rate of return after one year if MIZ is selling at $ 12
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