An investor of $10,000 to invest Twitter Inc. currently traded at $100 with 50% initial margin....
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
An investor of $10,000 to invest Twitter Inc. currently traded at $100 with 50% initial margin. Suppose Twitter does not pay dividend. Maintenance margin percentage required by the broker is 35%. Ignore the interest on the margin. What is the total market value of Twitter stock the investor purchased? b) At what price of Twitter stock will the investor receive a margin call from the broker? c) What is the margin percentage if the Twitter stock drops by 30%? d) What is the rate of return on the investor's investment if the Twitter stock drops by 30%? An investor of $10,000 to invest Twitter Inc. currently traded at $100 with 50% initial margin. Suppose Twitter does not pay dividend. Maintenance margin percentage required by the broker is 35%. Ignore the interest on the margin. What is the total market value of Twitter stock the investor purchased? b) At what price of Twitter stock will the investor receive a margin call from the broker? c) What is the margin percentage if the Twitter stock drops by 30%? d) What is the rate of return on the investor's investment if the Twitter stock drops by 30%?
Expert Answer:
Related Book For
Posted Date:
Students also viewed these finance questions
-
You receive a telephone call from a company you never do business with requesting a reference on one of your employees, Mary Sunshine. You believe that Mary is generally incompetent and would be...
-
You receive a phone call from someone you have not spoken to recently. The caller is excited, having just heard that a brand new mutual fund is positioned to deliver large gains in the coming year....
-
What type of return does an investor expect to receive in exchange for providing financial resources to a business? What type of return does a creditor expect from providing financial resources to an...
-
A 300-cm-long piece of straight wire is aligned vertically along the z-axis. The wire carries a downward current of 6.00 A. There is a 2.00-T magnetic field in the negative x-direction surrounding...
-
Are there substitutes for leadership present in this situation? What neutralizers must Grace overcome to be an effective leader?
-
Consider the following data visualization: Matt Araiza's punts go booming down the field Distance traveled by punts from Matt Araiza of San Diego State, and number of punts at each distance, vs. the...
-
What privacy concerns might arise from the use of biometric authentication techniques? What about the embedding of RFID tags in products such as clothing?
-
This year, Donnelly, Inc., will produce 57,600 hot water heaters at its plant in Delaware, in order to meet expected global demand. To accomplish this, each laborer at the plant will work 160 hours...
-
20. [0/1 Points] DETAILS PREVIOUS ANSWERS HARMATHAP12 12.2.055. Because of job outsourcing, a town predicts that its public school population will decrease at the rate ON -400 x+144 where x is the...
-
Paolo is a 50% partner in the Capri Partnership and has decided to terminate his partnership interest. Paolo is considering two options as potential exit strategies. The first is to sell his...
-
Consider these reactions: The intermediate A is a covalently bonded compound that has typical 1H NMR signals for aromatic ring hydrogens and only one additional signal at 1.21, with an area ratio of...
-
As we discuss EBDM this week and your workplace or other organization you may know, have you been placed in a position to develop ways to energize membership to achieve set personal goals, as well as...
-
Looking at the perspective of a patient Most employer based health insurance includes deductibles, co-pays, and other mechanisms to engage the employee in the overall cost of healthcare expense....
-
Reference: https://www.youtube.com/watch?v=tzG3I7nMEks Please the video/reference above to answer the following questions: 1. Explain a general review of the movie 2. Explain a Recap the plot 3,...
-
1. How is the concept of incremental analysis used in decision making? 2. What does it mean when someone says "You get what you measured"? 3. What are the impacts of information technology? You must...
-
What is the future value of $1,200, placed in a saving account for four years if the account pays 6.00%, compounded quarterly? (Your answer should be correct to two decimal places.) Your brother, who...
-
Equity, Trusts and Succession - Workshop 10 Workshop Exercises (to be attempted in the student-led workshop) Workshop Exercise 1 In relation to the scenario below, advise the beneficiaries what...
-
Several months have passed and the Managing Partner approved and properly filed the Complaint and properly submitted the Request for Production of Documents that you drafted. In fact, it has been 75...
-
Consider a bond paying a coupon rate of 10% per year semiannually when the market interest rate is only 4% per half-year. The bond has 3 years until maturity. a. Find the bonds price today and 6...
-
Suppose you find that prices of stocks before large dividend increases show on average consistently positive abnormal returns. Is this a violation of the EMH?
-
Would the answer to Problem 17 change for more risk-averse or risk-tolerant investors? Explain. The correlation coefficients between pairs of stocks are as follows: Corr( A, B ) = .85; Corr( A, C ) =...
-
Economic rent is the payment to a resource in excess of its _________.
-
Discuss the case for redistribution on the grounds of fairness and for efficiency and productivity.
-
Discuss the different types of discrimination and whether or not differences in earnings reflect discrimination or differences in productivity.
Study smarter with the SolutionInn App