You bot $1000 stocks on margin using $700 of your own cash and $300 borrowed from your broker. The maintenance margin requirement of 30%. What's the market value of your stocks just before triggering a margin call? 418.57 428.57 500 408.57 468.57 O 448.57 O 438.57 458.57

You bot $1000 stocks on margin using $700 of your own cash and $300 borrowed from your broker. The maintenance margin requirement of 30%. What's the market value of your stocks just before triggering a margin call? 418.57 428.57 500 408.57 468.57 O 448.57 O 438.57 458.57

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

Section: Chapter Questions

Problem 1PS

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At time t=0 Mr. Anderson sets up a riskless portfolio by taking a position in an option and in the underlying asset. Explain what Mr. Anderson needs to do at time t=1 to keep his portfolio risk neutral and why. A stock price is currently $100 and at the end of four months it will be ST . A derivative written on this stock pays off expST1/3 in four months. Given that u = 1.15, d = 0.87, and that the risk-free interest rate is 10% p.a. (continuously compounded), answer the following questions using a one-period binomial model (show all the details of your calculations and display the results with four decimal places): Calculate the value of ∆ Calculate the current value of the derivative.
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The following tables summarizes the 2019 income statement and end-year balance sheet of Drake’s Bowling Alleys. Drake’s financial manager forecasts a 10% increase in sales and costs in 2020. The ratio of sales to average assets is expected to remain at 0.40. Interest is forecasted at 5% of debt at the start of the year. INCOME STATEMENT, 2019 (Figures in $ thousands) Sales $ 1,600 (40% of average assets)a Costs 1,200 (75% of sales) Interest 32 (5% of debt at start of year)b Pretax profit $ 368 Tax 147 (40% of pretax profit) Net income $ 220 a Assets at the end of 2018 were $3,900,000. b Debt at the end of 2018 was $650,000. BALANCE SHEET, YEAR-END (Figures in $ thousands) Assets $ 4,100 Debt $ 650 Equity 3,450 Total $ 4,100 $ 4,100 a. What is the implied level of assets at the end of 2020? (Do not round your intermediate calculations. Enter your answer in thousands.) b. If…
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For each of the following scenarios, recalculate the intrinsic value of Chevron’s shares using the free cash flow model of Spreadsheet 13.2 Download Spreadsheet 13.2(included with the question). Treat each scenario independently.(LO 13-4) The terminal growth rate will be 3%.Chevron’s current stock market beta (cell B21) is 1.25.The market risk premium (cell B27) is 6.5%.

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