You are an investor, which to buy 150 shares of XYZ stocks through a broker in the
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You are an investor, which to buy 150 shares of XYZ stocks through a broker in the trading floor. Currently the price of the share is $65 and decided to use margin option. The initial margin is set for 50%, while the maintenance margin is 40%. If the price goes down to $60, what will be your equity margin? Determine the price at which there will be a margin call? If the share price goes up to $75, what will be the rate of return?
Q1) Discuss the distinction between the Primary and the Secondary Markets. Why do you think liquidity of Secondary Market is important for the activities of primary markets.
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