You bought 1000 shares of XYZ common stock on margin at the price of $70 per share: The initial margin is 50% and themaintenance margin is 40%. Now if the stock price falls to $60 per share, a margin call will be given at the price of SO58.3356.3360.3259.98

Let's understand maintenance margin with an example.Suppose the initial position was $50,000 and the…

Answered: You bought 1000 shares of XYZ comman…

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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Similar questions

You buy 300 shares of Suncor Energy for $25 per share and deposit initial margin of 50%. The next day, Suncor Energy 's price drops to $20 per share. What is your actual margin the next day? Multiple Choice 25% 40% 50% 62.5% 60%
Suppose you believe that BVC Inc.’s stock price is going to decline from its current level of P92.50 sometime during the next 5 months. For P350.25 you could buy a 5-month put option giving you the right to sell 100 shares at a price of P94.00 per share. If you bought a 100-share contract for P350.25 and BVCl Inc.’s stock price actually dropped to P75.00, what would be your net profit (after transactions costs but before taxes)? Format: 1,111.11
You purchased 2,200 shares of stock at $68 a share. The stock is currently selling for $56 a share. The initial margin was 55 percent and the maintenance margin is 40 percent. What is your current margin position? 59.00 percent 67.20 percent 62.90 percent 64.59 percent 73.00 percent
You purchase 800 shares of CUW at $71.51 using your full margin which as an initial margin of 70% (or 0.70). The maintenance margin is 45% (or 0.45). At what price will you get your margin call?" (Neglect any interest on the cash loan)
The margin requirement on a stock purchase is 28 % . You fully use the margin allowed to purchase 100 shares of TAMR at $ 30 If the price drops to $ 24 , what is your percentage loss
Please answer is 24840, only post if your answer comes this with explanation and concept. Thabks!
One year ago you entered a margin trade involving 200 shares of stock at a price of £35 a share and an initial margin of 60%. Now you sell the stock for £32 a share. What is the initial Dollar margin that you need for the trade? Group of answer choices 8400 3840 4200 2800
Energy Cat Company stockholders expect to receive a year- end dividend of $5 per share and then immediately sell their shares for $60 dollars per share. If the required rate of return for the stock is 10%, what is the current value of the stock? $65.00 $60.00 $100.00 $59.09 $650.00
It is believed that Blue Co.s stock price is going to decline from its current level of P88.50 anytime during the next 3 months. A 3-month put option can be bought for P625 which gives the buyer the right to sell 50 shares at a price of P90 per share. What would be the net profit if you bought a 50- share contract for P625 and Blue Co.'s stock price dropped to P75? *
You sold short 200 shares of common stock at $60 per share. The initial margin is 65%. What would your rate of return be if you repurchase the stock at $80 per share. Ignore interest on the margin.
You buy stock on margin in your brokerage account when it is trading at $42.76 per share. You have $4050 in equity (cash) in your account and buy 195 shares. Your broker makes a margin loan so you can pay the difference at an annual rate of 0.0825 One year later the stock price is 44.9 What is the margin percentage in the account one year after the trade is made? Group of answer choices 0.4933 0.4698 0.4247 0.4447 0.4014

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You bought 1000 shares of XYZ comman stock on margin at the price of $70 per share. The initial margin is 50% and the maintenance margin is 40%. Now if the stock price falls to $60 per share, a margin call will be given at the price of $ 58.33 56.33 60.32 59.98