1) You borrowed $8,000 to purchase 300 shares of Stock Y at $40 per share. The interest...
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Question:
1) You borrowed $8,000 to purchase 300 shares of Stock Y at $40 per share. The interest rate on the loan is 8%. The maintenance margin ratio is 30%. Below what stock price will you receive a margin call?
2) Continued with previous question. Suppose the margin trader wants to limit his investment return no worse than -10%, what order instruction should he give with the margin position?
a) stop-buy order b) stop-loss order
c) limit buy order
3) Continued with the previous questions. What stop price should the trader give to limit his return no worse than -10%
Related Book For
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1337614689
9th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
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