a) You buy 100 shares of Suphi Company stock on margin. The share price is $50,...

 

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a) You buy 100 shares of Suphi Company stock on margin. The share price is $50, the initial margin is 50%, and the stock pays no dividends. What is the maintenance margin on the account if the margin call is to be triggered when the share price is $30? Ignore the interest on the margin. b) You buy 200 shares of Zeytin Company stock on margin. The share price is $60, the initial margin is 60%, and the stock pays no dividends. What is your rate of return on equity if you sell the stock one year later for $45 per share? Again, ignore the interest on the margin. c) You short 300 shares of Bambi Company stock at $50 per share. The maintenance margin on your account is 33.33%. How many dollars was your initial margin deposit (at t=0) if the margin call is to be triggered when the share price is $60? a) You buy 100 shares of Suphi Company stock on margin. The share price is $50, the initial margin is 50%, and the stock pays no dividends. What is the maintenance margin on the account if the margin call is to be triggered when the share price is $30? Ignore the interest on the margin. b) You buy 200 shares of Zeytin Company stock on margin. The share price is $60, the initial margin is 60%, and the stock pays no dividends. What is your rate of return on equity if you sell the stock one year later for $45 per share? Again, ignore the interest on the margin. c) You short 300 shares of Bambi Company stock at $50 per share. The maintenance margin on your account is 33.33%. How many dollars was your initial margin deposit (at t=0) if the margin call is to be triggered when the share price is $60?

Answer rating: 100% (QA)

a To calculate the maintenance margin on the account we first need to determine the initial margin and the margin call price Given Share price 50 Init... View the full answer