Your broker requires you to deposit You purchase 800 shares of Zephyr Corp. stockon margin at a price of $52 per share. Yourbroker requires you to deposit $20,400.1. What is your margin loan amount?2. What is the initial margin requirement?

Let's calculate the margin loan amount and the initial margin requirement.1. Calculate the Total…

Answered: You purchase 800 shares of Zephyr Corp.…

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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Dée Trader opens a brokerage account and purchases 300 shares of Internet Dreams at $40 per share. She borrows $4,000 from her broker to help pay for the purchase. The interest rate on the loan is 8%.a. What is the margin in Dée’s account when she first purchases the stock?b. If the share price falls to $30 per share by the end of the year, what is the remaining margin in her account? If the maintenance margin requirement is 30%, will she receive a margin call?c. What is the rate of return on her investment?
Dée Trader opens a brokerage account and purchases 300 shares of Internet Dreams at $40 per share. She borrows $4,000 from her broker to help pay for the purchase. The interest rate on the loan is 8%Dée Trader opens a brokerage account and purchases 300 shares of Internet Dreams at $40 per share. She borrows $4,000 from her broker to help pay for the purchase. The interest rate on the loan is 8%. Required: a. What is the margin in Dée’s account when she first purchases the stock? b. If the share price falls to $30 per share by the end of the year, what is the remaining margin in her account? c. If the maintenance margin requirement is 30%, will she receive a margin call? multiple choice Yes No Correct d. What is the rate of return on her investment? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)
Give only typing answer with explanation and conclusion
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You purchase 800 shares of Zephyr Corp. stock on margin at a price of $52 per share. Your broker requires you to deposit $20,400. 1. What is your margin loan amount? 2. What is the initial margin requirement?