You purchased one hundred shares of MSFT for fifty dollars per share using a sixty percent initial margin. The price of the stock falls to thirty dollars per share. What is the amount of your margin call if a maintenance margin is thirty percent? O None of the given answers is correct O 212 O 221 0 0 O 216

You purchased one hundred shares of MSFT for fifty dollars per share using a sixty percent initial margin. The price of the stock falls to thirty dollars per share. What is the amount of your margin call if a maintenance margin is thirty percent? O None of the given answers is correct O 212 O 221 0 0 O 216

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 believe the price of Freeze Frame Co. stock is going to fall, so you short 1,000 shares at a price of $57. The initial margin is 55 percent. Ignore dividends. a. Construct the equity balance sheet for the original trade b. Construct equity balance sheets for a stock price of $52 per share c. What is your effective annual return if you cover your short position at this price in five months? d, What is your margin?
Suppose you can buy 983 shares of Vertex Pharmaceuticals Incorporated (VRTX) stock on margin at $167 per share. Your initial margin is 51% and you borrow at the 7 percent. You sell your VRTX shares 6 months later for $185 per share. There were no dividends paid and the prices reflect commissions paid. What is your percent return if you buy on margin? [Enter the answer in as a percent (e.g., 5.55% = 5.55) - not a decimal]
An investor opens a margin account with an initial deposit of $5500. He then purchases 870 shares of a stock at $44. His margin account has a maintenance margin requirement of 30%. Ignoring commissions and interest, IF the price changed to 27 WHAT IS YOUR NEW EQUITY The correct answer is AT WHAT PRICE YOU WILL GET A MARGIN CALL PRICE?
You purchase 110 shares for $40 a share ($4,400), and after a year the price falls to $35. Calculate the percentage return on your investment if you bought the stock on margin and the margin requirement was (ignore commissions, dividends, and interest expense): 15 percent. Use a minus sign to enter the amount as a negative value. Round your answer to one decimal place. % 50 percent. Use a minus sign to enter the amount as a negative value. Round your answer to one decimal place. % 75 percent. Use a minus sign to enter the amount as a negative value. Round your answer to one decimal place. %
Suppose the call money rate is 4.5 percent, and you pay a spread of 2.5 percent over that. You buy 700 shares of stock at $61 per share. You put up $27,755. One year later, the stock is selling for $75 per share and you close out your position. What is your return assuming a dividend of $0.90 per share is paid?
You own 1,000 shares of stock in Avondale Corp. You will receive a $.80 per share dividend in one year. In two years, Avondale will pay a liquidating dividend of $45 per share. The required return on Avondale stock is 10 percent. a. What is the current share price of your stock (ignoring taxes)? b. If you would rather have equal dividends in each of the next two years by creating homemade dividends, what would be the cash flow for Year 1 and Year 2?
You sell a stock for $50.00 that was held for 10 years. You earned a return of 8%. What was the original cost of the stock?
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.

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