An investor of $10,000 to invest Twitter Inc. currently traded at $100 with 50% initial margin....
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An investor of $10,000 to invest Twitter Inc. currently traded at $100 with 50% initial margin. Suppose Twitter does not pay dividend. Maintenance margin percentage required by the broker is 35%. Ignore the interest on the margin. What is the total market value of Twitter stock the investor purchased? b) At what price of Twitter stock will the investor receive a margin call from the broker? c) What is the margin percentage if the Twitter stock drops by 30%? d) What is the rate of return on the investor's investment if the Twitter stock drops by 30%? An investor of $10,000 to invest Twitter Inc. currently traded at $100 with 50% initial margin. Suppose Twitter does not pay dividend. Maintenance margin percentage required by the broker is 35%. Ignore the interest on the margin. What is the total market value of Twitter stock the investor purchased? b) At what price of Twitter stock will the investor receive a margin call from the broker? c) What is the margin percentage if the Twitter stock drops by 30%? d) What is the rate of return on the investor's investment if the Twitter stock drops by 30%?
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