Provide answer financial accounting You decide to buy 600 shares of stock at a price of $43 andan initial margin of 55 percent. What is the maximumpercentage decline in the stock before you will receive amargin call if the maintenance margin is 35 percent?

Step 1: Define Calculation of MarginsThe margin amounts are calculated by the respective exchanges…

Answered: You decide to buy 600 shares of stock…

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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You invested in 800 shares of stock for $49.20 a share. The initial margin requirement is 65 percent and the maintenance margin is 35 percent. What is the lowest the stock price can go before you receive a margin call? What is the lowest the stock price can go before you receive a margin call if both the initial and maintenance margins are 100%? What is the lowest the stock price can go before you receive a margin call if both the initial and maintenance margins are 0%? How would your answers to the three questions above change if you invested in 8000 shares instead of 800 shares?
An investor short sells 100 shares of a stock for £50 per share. The initial margin is 50%. With a maintenance margin of 30%, what is the stock price at which there will be a margin call? If rather than short selling the shares you buy them on margin, explain how the definition of the margin would change.
You purchased 200 shares of ABC common stock on margin at $50 per share. Assume the initial margin is 50% and the maintenance margin is 30%. You will get a margin call if the stock drops below what price? (Assume the stock pays no dividends and ignore interest on the margin loan.)
You want to purchase Stock A currently trading at $50 per share. You have $10,000 of your own to invest. You borrow an additional $10,000 from your broker and invest $20,000 in the stock. How far does the price of Stock A have to fall for you to get a margin call if the maintenance margin is 35%? Round your answer to two decimal places and enter the number without the dollar sign
You short sell 200 shares of stock at $48.23 per share and cover your short position three months later at $44.66 per share. If your broker's initial margin requirement is 65%, and the maintenance margin requirement is 45%, what is your rate of return? 100tne
The current stock price of Sanders is at $35. A put on Sanders stock with a strike price of $35 is priced at $8 per share while a call with a strike price of $35 is priced at $8. If you implement a covered call strategy today and the stock price decrease to $32, what is your total profit or loss (assuming you implement the strategy using 100 shares)?
You are bearish on Ali baba’s stock and decide to sell short 100 shares at the current market price of $50 per share. a. How high can the price of the stock go before you get a margin call if the maintenance margin is 40% of the value of the short position? b. Assume a year later the price of Ali Baba’s stock risen from $50 to $60 and the stock has paid a dividend of $2 per share. What is the rate of return from Ali Baba’s stock?
You’ve borrowed $22,000 on margin to buy shares in Ixnay, which is now selling at $32 per share. Your account starts at the initial margin requirement of 50%. The maintenance margin is 30%. Two days later, the stock price falls to $22 per share. a. Will you receive a margin call? multiple choice No Yes b. How low can the price of Ixnay shares fall before you receive a margin call? (Round your answer to 2 decimal places.) Margin call will be made as price _______ or lower.
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A put is the option to sell stock at $54. It expires after three months and currently sells for $2 when the price of the stock is $55. If an investor buys this put, what will the profit be after three months if the price of the stock is $60? $54? $48? Round your answers to the nearest dollar. Use a minus sign to enter loss values, if any. If the answer is zero, enter "0". Price of the stock Profit on the position in the put $60 $ $54 $ $48 $ What will be the profit from selling this put after three months if the price of the stock is $60? $54? $48? Round your answers to the nearest dollar. Use a minus sign to enter loss values, if any. If the answer is zero, enter "0". Price of the stock Profit on the position in the put $60 $ $54 $ $48 $
am. 103.
You sell short 200 shares of DTI that are currently selling at $25 per share. You post additional $2,500 to meet the 50% initial margin requirement. What is your margin if the stock price changes to $23.7? Enter your answer as a decimal, rounded to three decimal places. Your Answer:

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You decide to buy 600 shares of stock at a price of $43 and an initial margin of 55 percent. What is the maximum percentage decline in the stock before you will receive a margin call if the maintenance margin is 35 percent?