You have a brokerage account with the following terms: You have a margin trading account with 50%

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You have a brokerage account with the following terms:

You have a margin trading account with 50% initial margin and 35% maintenance margin. The interest rate on your loans is 8% per year.

1. You deposit $15,000 of your own money in the account. You will use all of it to buy on margin a stock trading at $50 per share.

A) Calculate the price at which you will receive a margin call

B) Calculate your ROI - if after 3 months the share pays a dividend of $0.35 per share and is trading at $56.50 per share.

Related Book For answer-question

Income Tax Fundamentals 2013

ISBN: 9781285586618

31st Edition

Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill

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Posted Date: Dec 06, 2023 05:39 AM

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You have a brokerage account with the following terms: You have a margin trading account with 50%

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1 Number of shares that can be bought with the 15000 deposit 15000 50 per share 300 shar... View the full answer

Income Tax Fundamentals 2013

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