(A) An account was opened by Old Economy traders to short sell 1,000 shares of Internet dreams. The requirement of margin at the beginning accounts for 50%. The price of internet dream after 1 year increased from $40 to $50. The dividend paid by the stock per share accounts for $2 To calculate: The remaining margin in old economy account. Introduction: Margin in the trading account refer to the minimum amount of money, which the investor is required to maintain in his account in the form of margin for placing a trade order.

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Answer 1

Question

Chapter 3, Problem 7PS

Summary Introduction

(A)

An account was opened by Old Economy traders to short sell 1,000 shares of Internet dreams. The requirement of margin at the beginning accounts for 50%. The price of internet dream after 1 year increased from $40 to $50. The dividend paid by the stock per share accounts for $2

To calculate:

The remaining margin in old economy account.

Introduction:

Margin in the trading account refer to the minimum amount of money, which the investor is required to maintain in his account in the form of margin for placing a trade order.

Summary Introduction

(B)

To determine:

Whether Old economy traders will be able to receive the margin call if the requirement for margin maintenance is 30%

Introduction:

Margin call comes into picture when the investor is required to deposit additional securities or money so that the margin in the investor's account stands equivalent to the minimum margin requirement.

Summary Introduction

(C)

To calculate:

Rate of return on the investment made by Old economy traders

Introduction:

Rate of return refers to the net loss or gain ascertained out of an investment over a particular period of time. It is generally represented as percentage of the initial cost of investment.

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Answer 2

Question

Chapter 3, Problem 7PS

Summary Introduction

(A)

An account was opened by Old Economy traders to short sell 1,000 shares of Internet dreams. The requirement of margin at the beginning accounts for 50%. The price of internet dream after 1 year increased from $40 to $50. The dividend paid by the stock per share accounts for $2

To calculate:

The remaining margin in old economy account.

Introduction:

Margin in the trading account refer to the minimum amount of money, which the investor is required to maintain in his account in the form of margin for placing a trade order.

Summary Introduction

(B)

To determine:

Whether Old economy traders will be able to receive the margin call if the requirement for margin maintenance is 30%

Introduction:

Margin call comes into picture when the investor is required to deposit additional securities or money so that the margin in the investor's account stands equivalent to the minimum margin requirement.

Summary Introduction

(C)

To calculate:

Rate of return on the investment made by Old economy traders

Introduction:

Rate of return refers to the net loss or gain ascertained out of an investment over a particular period of time. It is generally represented as percentage of the initial cost of investment.

Expert Solution & Answer

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Check out a sample textbook solution

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Answer 3

Question

Chapter 3, Problem 7PS

Summary Introduction

(A)

An account was opened by Old Economy traders to short sell 1,000 shares of Internet dreams. The requirement of margin at the beginning accounts for 50%. The price of internet dream after 1 year increased from $40 to $50. The dividend paid by the stock per share accounts for $2

To calculate:

The remaining margin in old economy account.

Introduction:

Margin in the trading account refer to the minimum amount of money, which the investor is required to maintain in his account in the form of margin for placing a trade order.

Summary Introduction

(B)

To determine:

Whether Old economy traders will be able to receive the margin call if the requirement for margin maintenance is 30%

Introduction:

Margin call comes into picture when the investor is required to deposit additional securities or money so that the margin in the investor's account stands equivalent to the minimum margin requirement.

Summary Introduction

(C)

To calculate:

Rate of return on the investment made by Old economy traders

Introduction:

Rate of return refers to the net loss or gain ascertained out of an investment over a particular period of time. It is generally represented as percentage of the initial cost of investment.

Expert Solution & Answer

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Answer 4

Question

Chapter 3, Problem 7PS

Summary Introduction

(A)

An account was opened by Old Economy traders to short sell 1,000 shares of Internet dreams. The requirement of margin at the beginning accounts for 50%. The price of internet dream after 1 year increased from $40 to $50. The dividend paid by the stock per share accounts for $2

To calculate:

The remaining margin in old economy account.

Introduction:

Margin in the trading account refer to the minimum amount of money, which the investor is required to maintain in his account in the form of margin for placing a trade order.

Summary Introduction

(B)

To determine:

Whether Old economy traders will be able to receive the margin call if the requirement for margin maintenance is 30%

Introduction:

Margin call comes into picture when the investor is required to deposit additional securities or money so that the margin in the investor's account stands equivalent to the minimum margin requirement.

Summary Introduction

(C)

To calculate:

Rate of return on the investment made by Old economy traders

Introduction:

Rate of return refers to the net loss or gain ascertained out of an investment over a particular period of time. It is generally represented as percentage of the initial cost of investment.

Expert Solution & Answer

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Answer 5

Chapter 3, Problem 7PS

Summary Introduction

(A)

An account was opened by Old Economy traders to short sell 1,000 shares of Internet dreams. The requirement of margin at the beginning accounts for 50%. The price of internet dream after 1 year increased from $40 to $50. The dividend paid by the stock per share accounts for $2

To calculate:

The remaining margin in old economy account.

Introduction:

Margin in the trading account refer to the minimum amount of money, which the investor is required to maintain in his account in the form of margin for placing a trade order.

Summary Introduction

(B)

To determine:

Whether Old economy traders will be able to receive the margin call if the requirement for margin maintenance is 30%

Introduction:

Margin call comes into picture when the investor is required to deposit additional securities or money so that the margin in the investor's account stands equivalent to the minimum margin requirement.

Summary Introduction

(C)

To calculate:

Rate of return on the investment made by Old economy traders

Introduction:

Rate of return refers to the net loss or gain ascertained out of an investment over a particular period of time. It is generally represented as percentage of the initial cost of investment.

Answer 6

Chapter 3, Problem 7PS

Summary Introduction

(A)

An account was opened by Old Economy traders to short sell 1,000 shares of Internet dreams. The requirement of margin at the beginning accounts for 50%. The price of internet dream after 1 year increased from $40 to $50. The dividend paid by the stock per share accounts for $2

To calculate:

The remaining margin in old economy account.

Introduction:

Margin in the trading account refer to the minimum amount of money, which the investor is required to maintain in his account in the form of margin for placing a trade order.

Answer 7

Chapter 3, Problem 7PS

Summary Introduction

(A)

An account was opened by Old Economy traders to short sell 1,000 shares of Internet dreams. The requirement of margin at the beginning accounts for 50%. The price of internet dream after 1 year increased from $40 to $50. The dividend paid by the stock per share accounts for $2

To calculate:

The remaining margin in old economy account.

Introduction:

Margin in the trading account refer to the minimum amount of money, which the investor is required to maintain in his account in the form of margin for placing a trade order.

Answer 8

Summary Introduction

(B)

To determine:

Whether Old economy traders will be able to receive the margin call if the requirement for margin maintenance is 30%

Introduction:

Margin call comes into picture when the investor is required to deposit additional securities or money so that the margin in the investor's account stands equivalent to the minimum margin requirement.

Answer 9

Summary Introduction

(B)

To determine:

Whether Old economy traders will be able to receive the margin call if the requirement for margin maintenance is 30%

Introduction:

Margin call comes into picture when the investor is required to deposit additional securities or money so that the margin in the investor's account stands equivalent to the minimum margin requirement.

Answer 10

Summary Introduction

(C)

To calculate:

Rate of return on the investment made by Old economy traders

Introduction:

Rate of return refers to the net loss or gain ascertained out of an investment over a particular period of time. It is generally represented as percentage of the initial cost of investment.

Answer 11

Summary Introduction

(C)

To calculate:

Rate of return on the investment made by Old economy traders

Introduction:

Rate of return refers to the net loss or gain ascertained out of an investment over a particular period of time. It is generally represented as percentage of the initial cost of investment.

Answer 12

Expert Solution & Answer

Answer 13

Expert Solution & Answer

Answer 14

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Answer 15

Ch. 3 - Prob. 1PS Ch. 3 - Prob. 2PS Ch. 3 - Prob. 3PS Ch. 3 - Prob. 4PS Ch. 3 - Prob. 5PS Ch. 3 - Prob. 6PS Ch. 3 - Prob. 7PS Ch. 3 - Prob. 8PS Ch. 3 - Prob. 9PS Ch. 3 - Prob. 10PS

(C) To calculate: Rate of return on the investment made by Old economy traders Introduction: Rate of return refers to the net loss or gain ascertained out of an investment over a particular period of time. It is generally represented as percentage of the initial cost of investment.

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Chapter 3 Solutions

(C)

To calculate:

Rate of return on the investment made by Old economy traders

Introduction:

Rate of return refers to the net loss or gain ascertained out of an investment over a particular period of time. It is generally represented as percentage of the initial cost of investment.