You've borrowed $27,392 on margin to buy shares in bxnay, which is now selling at $42.8 per share. You invest 1280 shares. Your account starts at the initial margin requirement of 50% The maintenance margin is 35% Two days later, the stock price changes to $49 per share. a. Will you receive a margin call? O Yes ONo b. At what price will you receive a margin cal? (Round your enswer to 2 decimel pleces.)

You've borrowed $27,392 on margin to buy shares in bxnay, which is now selling at $42.8 per share. You invest 1280 shares. Your account starts at the initial margin requirement of 50% The maintenance margin is 35% Two days later, the stock price changes to $49 per share. a. Will you receive a margin call? O Yes ONo b. At what price will you receive a margin cal? (Round your enswer to 2 decimel pleces.)

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

See similar textbooks

Similar questions

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.
Assume you entered a 1,500 share short position in Pollution Co. at $37/share, which is the only position currently in this trading account. The initial margin you were required to post was 50% and the maintenance margin is 35%. b. If the share price does rise just enough to trigger a margin call,(i) how much margin will remain in the account when you receive the margin and (ii) how much additional cash will you be required to contribute to the account in order to maintain the short position?
Jitu
You just bought $8,000 worth of a stock priced at $40 per share using 50% initial margin. The broker charges 6% on the margin loan and requires a 30% maintenance margin. At what price would you expect to get a margin call? To restore your margin to the initial margin level, how much would you need to deposit?
You purchase 60 shares for $60 a share ($3,600), and after a year the price falls to $55. 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): 25 percent. Use a minus sign to enter the amount as a negative value. Round your answer to one decimal place. % 65 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 you sell short 200 shares of BP ADR currently selling at $40 per share. You give your broker $5000 to establish your margin account. You have no interest on the funds in your margin account. Assume that BP also has paid a year-end dividend of $0.5 per share, what will be your rate of return after one year if the BP price is $38. (please keep three decimal places, such as 0.031, NOT 3.1%)
answer c please
You purchase 100 shares of stock for $40 a share. The stock pays a $4 per share dividend at year-end. a. What is the rate of return on your investment if the end-of-year stock price is (i) $36; (ii) $40; (iii) $44? (Leave no cells blank - be certain to enter "0" wherever required. Enter your answers as a whole percent.) b. What is your real (inflation-adjusted) rate of return if the inflation rate is 8%? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Negative amounts should be indicated by a minus sign.)
Assume you purchase a share of stock for $50 at time t=0, and another share at $65 at time t= 1, and at the end of year 1 and year 2, the stock paid a $2.00 dividend. Also, at the end of year 2 you sold both shares for $70 each. What is the time-weighted rate of return? Give typing answer with explanation and conclusion
You are bearish on Telecom and decide to sell short 100 shares at the current market price of $47 per share. Required: a. How much in cash or securities must you put into your brokerage account if the broker’s initial margin requirement is 50% of the value of the short position? b. How high can the price of the stock go before you get a margin call if the maintenance margin is 30% of the value of the short position?
am. 103.
Assume an initial margin requirement of 50% and a maintenance margin of 30%. An investor buys 100 shares of stock on margin at $60 per share. The price of the stock subsequently drops to $50. a. What is the actual margin at $50? b. If the price declines to $49, is there a margin call? c. Assume that the price declines to $45. What is the amount of the margin call? At $35?

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS