Assume you have a margin account with a 50% initial margin. You purchase 100 shares of stock

Fantastic news! We've Found the answer you've been seeking!

Question:

Assume you have a margin account with a 50% initial margin. You purchase 100 shares of stock at $80 per share. The price increases to $100 per share. What is the net value of your investment (margin) now?

(a) $10,000

(b) $8,000

(d) $5,000

(e) $2,000

Related Book For answer-question

Fundamentals of Investing

ISBN: 978-0133075359

12th edition

Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk

See More Books

Posted Date: Dec 19, 2018 09:59 AM

See More Questions

Assume that an investor buys 100 shares of stock at $50 per share, putting up a 60% margin. a. What is the debit balance in this transaction? b. How much equity capital must the investor provide to...
Assume that an investor buys 100 shares of stock at $50 per share, putting up a 60% margin. If the stock rises to $60 per share, what is the investor's new margin position?
Assume you purchase 100 shares of stock at $44 per share and wish to hedge your position by writing a 100-share call option on your holdings. The option has a 40 strike price and a premium of 8.50....
In 1976, Mohamed EI-Iladad earned an undergraduate accounting degree in his native Egypt. Before he began his accounting career, El-Hadad completed his compulsory service in the Egyptian military...
The Scottsville Manufacturing Company uses a raw and in process (RIP) inventory account and expenses all conversion costs to the cost of goods sold account. At the end of each month, all inventories...
Rocky Mountain Corporation makes two types of hiking boots-Xactive and Pathbreaker. Data concerning these two product line appear below: Direct materials per unit Direct labor cost per unit Direct...
Determine the slope at $A$ of the overhang white spruce beam. A a 400 lb -8 ft La 3 in. H 16 in. Section a-a B -4 ft. 400 lb-ft
The Chris Hall Company manufactures and distributes low-priced bottled wines to retailers. You are hired as a management consultant to help this company solve some of its systems problems. Describe...
You're a manager at a nonprofit. Your employee has been a planned- giving fundraiser there for five years. Four years ago, his performance was poor because he was undergoing chemotherapy. Since then,...
Palmer, a U.S. company, acquired 90% of Scalas voting stock for $32,600 in cash on January 1, 2019, when Scalas book value was $5,000. The fair value of the noncontrolling interest at the date of...
Annual and Average Returns for Stocks, Bonds, and T-Bills, 1950 to 2017 1950 to 2019 Average 1950 to 1959 Average 1960 to 1969 Average 1970 to 1979 1980 to 1989 Average Average Average 1990 to 1999...
What are the varieties of sexual behavior?
Are there different kinds of memory?
On June 10, 20X6, Dar Al Fatina purchased material supplies on account for $35,000. Which of the journal entries for this transaction in the table below is correct. A Date June 10, 20X6 Cash Accounts...
__________theory assumes that language acquisition is based on principles of conditioning and shaping.
Developmental psychologists are interested in the effects of both __________and __________on development.
With petroleum losing its luster, to what extent can/should Atlantic Canada depend on changing their fishing industry from cod to shrimp, crab, and lobster and tourism to improve the region's...
Reichenbach Co., organized in 2018, has set up a single account for all intangible assets. The following summary discloses the debit entries that have been recorded during 2018 and 2019. Instructions...
Create a recursive algorithm that determines if a path exists from the outside of the debris field to the center. The debris field is always square (n by n) and n will always be greater than 1, and...
A 25-year, zero-coupon bond was recently being quoted at 11.625% of par. Find the current yield and the promised yield of this issue, given that the bond has a par value of $1,000. Using semiannual...
Identify the four main types of online investment tools. How can they help you become a better investor?
Critics of longer trading hours believe that expanded trading sessions turn the stock market into a casino and place the emphasis more on short-term gains than on long-term investment. Do you agree?...
Following is a residual plot produced by MINITAB. Was it appropriate to compute the least-squares regression line? Explain. Residual -2 -3 1 2 3 5.0 5.5 09 6.0 Residuals Versus x 6.5 X 7.0 7.5 8.0
Following is a residual plot produced by MINITAB. Was it appropriate to compute the least-squares regression line? Explain. 50 50 Residuals Versus x 40 40 30 20 20 Residual 10 10 0 -10 -20 20 + -3 -2...
The following table presents the ages of the last 10 U.S. presidents and their wives on the first day of their presidencies. a. Compute the least-squares regression line for predicting the presidents...

Assume you have a margin account with a 50% initial margin. You purchase 100 shares of stock

Question:

Expert Answer:

c 6000 Explanation Initi... View the full answer

Fundamentals of Investing

Students also viewed these accounting questions