John bought 1,300 shares of ABC Corp. paying the then market price of $26.00 per share....

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John bought 1,300 shares of ABC Corp. paying the then market price of $26.00 per share. The margin requirement for ABC is 50% and John contributed the minimum amount necessary to make the purchase. The shares double in value and John sells. a. How much money did John contribute toward the purchase of these shares? (2 marks) 16900 b. What return on his investment did John earn prior to paying interest and transaction costs? (2 marks) 15600 c. Assume John did not sell the shares and cannot contribute any more margin to his account. The shares drop in value to $22.75 per share. What is the minimum number of shares the broker will sell? (3 marks) Number John bought 1,300 shares of ABC Corp. paying the then market price of $26.00 per share. The margin requirement for ABC is 50% and John contributed the minimum amount necessary to make the purchase. The shares double in value and John sells. a. How much money did John contribute toward the purchase of these shares? (2 marks) 16900 b. What return on his investment did John earn prior to paying interest and transaction costs? (2 marks) 15600 c. Assume John did not sell the shares and cannot contribute any more margin to his account. The shares drop in value to $22.75 per share. What is the minimum number of shares the broker will sell? (3 marks) Number

Answer rating: 100% (QA)

a John purchased 1300 shares at 26 per share for a total of 33800 The margin requirement was ... View the full answer