Assume a speculator sold 4,000 shares of a mortgage lender X short at $50 with an...

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Assume a speculator sold 4,000 shares of a mortgage lender X short at $50 with an initial margin of 60% and subseq maintenance margin call. Price Shares Initial Margin Maintenance $50.00 4,000 60.00% 40.00% What is the dollar amount that must be deposited to bring account equity back up to 60%? The dollar amount that must be deposited is $ . Round your answer to two decimal places. ED eBook Problem 3-15 Short Position Margin Assume an investor shorted 1,000 shares of Company Y at $17.00 using a 50% margin. Following a sharp rise in the stock to $20.40, the Investor has received a maintenance margin call. At this point, the investor is required to wire sufficient funds to bring account equity back to 50%. This information is summarized in the following table: Price Shares Initial Margin New Price $17.00 1,000 50% $20.40 How much in additional funds must be added to the account to bring account equity back to 50%? Additional funds in the amount of $ must be added to the account. Round your answer to the nearest cent. eBook Problem 3-13 Margin Call Assume an investor shorted Company Y at a price of $50.5 using a 50% margin. This information is summarized in the following table: Price Initial Margin Maintenance Margin $50.50 50% 30% At what price would the investor face a 30% maintenance margin call? The investor would face a 30% maintenance margin call at a price of $ . Round your answer to the nearest cent. 16. EOC Problems 3-12 11 eBook Problem 3-12 Margin Call Assume an investor went long Citigroup, Inc. (C) at a price of $28 using a 50% margin. This information is summarized in the following table: Price Initial Margin Maintenance Margin $28.00 50% 35% At what price would the investor face a 35 % maintenance margin call? The investor would face a 35 % maintenance margin call at a price of $ Round your answer to the nearest cent. eBook Problem 3-11 Margin for Short Position A stock sells for $54.00 per share. You sell short 200 shares using a 50% margin. A year later, the price has fallen to $51.00. This information is displayed in the following table: Shares Margin Price $54.00 New Price $51.00 200 50% (a) What is the initial equity you must have to initiate the trade? You must have an initial equity of s to initiate the trade. (b) What is your percent equity position at the end of the year? At the end of the year your percent equity position is %. Round your answer to 2 decimal places. 14. EOC Problems 3-10 eBook Problem 3-10 Margin for Long Position A stock sells for $30.00 per share. You purchase 200 shares using a 50% margin. A year later, the price has risen to $45.00. This information is displayed in the following table: Shares Margin Price $30.00 New Price $45.00 200 50% (a) What is the initial equity you must have to initiate the trade? You must have an initial equity of $ to initiate the trade. (b) What is your percent equity position at the end of the year? At the end of the year your percent equity position is %. Round your answer to 2 decimal places.. Problem 3-9 Market and Limit Orders One order is a market order for the purchase of 200 shares. A second order is a fill or kill limit order set at $46.80 for the purchase of 200 shares. When the two orders arrive at the stock exchange, the bid quote is $46.76 and the ask quote is $46.84. This information is displayed in the following table: Market Order Limit Order Bid $46.76 Ask $46.84 Buy (Shares) 200 200 Limit Price $46.80 (a) What is the value of the market order trade? The value of the market order trade is $ (b) What is the value of the limit order trade? The value of the limit order trade is $ .Enter a 0 if the trade has no value (when the trade is not filled). Grade it Now Save & Continue Continue without saving 12. EOC Problems 3-4 EB Problem 3-4 Value-Weighted Index Suppose that Company A represents a 5% weighting on a value-weighted index. If the index is at 7,000 and Company A's stock price increases by 9%, how much will this cause the index to increase? The index will increase by . Round your answer to one decimal place. eBook 11. EOC Problems 3-3 ER eBook Problem 3-3 Value-Weighted Index Consider a market value-weighted index with only 3 stocks: Stock A, Stock B, and Stock C. The current shares and current prices, as well as the original number of shares and original prices, of the stocks are summarized in the following table: Current Shares Current Price Original Shares Original Price Stock A Stock B 300 100 200 Stock C Assuming the base value is 100, the index level is $45 $61 $95 100 100 100 $25 $71 $55 . Round your answer to 4 decimal places.. Consider a price-weighted index like the DJIA with only 3 stocks: Stock A, Stock B, and Stock C. The original and new prices of these stocks, along with the divisor, are shown in the following table. Stock A Stock B Stock C Divisor Old Price New Price $30 $55 $68 0.2 $34 $59 $75 (a) What is the index level at the old prices? The index level at the old prices is (b) If the stock prices change to the new prices, as noted in the table, what would the new index level be? The new index level at the new prices would be (c) Given the change between the old and new prices, what is the index return? Round your answer to 2 decimal places. The index return is (d) If Stock C conducted a 2 for 1 stock split, what should the new divisor be? Round your answer to 4 decimal places. The new divisor would be A- GH Attempts Do No Harm/4 8. A simple example of short positions Suppose that an investor seeks to take a short position on the stock of company XYZ and that the price of XYZ is currently $120. An investor would take a short position if they believe that the price of the stock will Suppose that an investor has taken a short position on 100 shares of XYZ (price-$120 per share). If the price of XYZ rises to $150 per share, the investor will experience a of (Hint: Ignore the interest costs of the loan.) Assume a speculator sold 4,000 shares of a mortgage lender X short at $50 with an initial margin of 60% and subseq maintenance margin call. Price Shares Initial Margin Maintenance $50.00 4,000 60.00% 40.00% What is the dollar amount that must be deposited to bring account equity back up to 60%? The dollar amount that must be deposited is $ . Round your answer to two decimal places. ED eBook Problem 3-15 Short Position Margin Assume an investor shorted 1,000 shares of Company Y at $17.00 using a 50% margin. Following a sharp rise in the stock to $20.40, the Investor has received a maintenance margin call. At this point, the investor is required to wire sufficient funds to bring account equity back to 50%. This information is summarized in the following table: Price Shares Initial Margin New Price $17.00 1,000 50% $20.40 How much in additional funds must be added to the account to bring account equity back to 50%? Additional funds in the amount of $ must be added to the account. Round your answer to the nearest cent. eBook Problem 3-13 Margin Call Assume an investor shorted Company Y at a price of $50.5 using a 50% margin. This information is summarized in the following table: Price Initial Margin Maintenance Margin $50.50 50% 30% At what price would the investor face a 30% maintenance margin call? The investor would face a 30% maintenance margin call at a price of $ . Round your answer to the nearest cent. 16. EOC Problems 3-12 11 eBook Problem 3-12 Margin Call Assume an investor went long Citigroup, Inc. (C) at a price of $28 using a 50% margin. This information is summarized in the following table: Price Initial Margin Maintenance Margin $28.00 50% 35% At what price would the investor face a 35 % maintenance margin call? The investor would face a 35 % maintenance margin call at a price of $ Round your answer to the nearest cent. eBook Problem 3-11 Margin for Short Position A stock sells for $54.00 per share. You sell short 200 shares using a 50% margin. A year later, the price has fallen to $51.00. This information is displayed in the following table: Shares Margin Price $54.00 New Price $51.00 200 50% (a) What is the initial equity you must have to initiate the trade? You must have an initial equity of s to initiate the trade. (b) What is your percent equity position at the end of the year? At the end of the year your percent equity position is %. Round your answer to 2 decimal places. 14. EOC Problems 3-10 eBook Problem 3-10 Margin for Long Position A stock sells for $30.00 per share. You purchase 200 shares using a 50% margin. A year later, the price has risen to $45.00. This information is displayed in the following table: Shares Margin Price $30.00 New Price $45.00 200 50% (a) What is the initial equity you must have to initiate the trade? You must have an initial equity of $ to initiate the trade. (b) What is your percent equity position at the end of the year? At the end of the year your percent equity position is %. Round your answer to 2 decimal places.. Problem 3-9 Market and Limit Orders One order is a market order for the purchase of 200 shares. A second order is a fill or kill limit order set at $46.80 for the purchase of 200 shares. When the two orders arrive at the stock exchange, the bid quote is $46.76 and the ask quote is $46.84. This information is displayed in the following table: Market Order Limit Order Bid $46.76 Ask $46.84 Buy (Shares) 200 200 Limit Price $46.80 (a) What is the value of the market order trade? The value of the market order trade is $ (b) What is the value of the limit order trade? The value of the limit order trade is $ .Enter a 0 if the trade has no value (when the trade is not filled). Grade it Now Save & Continue Continue without saving 12. EOC Problems 3-4 EB Problem 3-4 Value-Weighted Index Suppose that Company A represents a 5% weighting on a value-weighted index. If the index is at 7,000 and Company A's stock price increases by 9%, how much will this cause the index to increase? The index will increase by . Round your answer to one decimal place. eBook 11. EOC Problems 3-3 ER eBook Problem 3-3 Value-Weighted Index Consider a market value-weighted index with only 3 stocks: Stock A, Stock B, and Stock C. The current shares and current prices, as well as the original number of shares and original prices, of the stocks are summarized in the following table: Current Shares Current Price Original Shares Original Price Stock A Stock B 300 100 200 Stock C Assuming the base value is 100, the index level is $45 $61 $95 100 100 100 $25 $71 $55 . Round your answer to 4 decimal places.. Consider a price-weighted index like the DJIA with only 3 stocks: Stock A, Stock B, and Stock C. The original and new prices of these stocks, along with the divisor, are shown in the following table. Stock A Stock B Stock C Divisor Old Price New Price $30 $55 $68 0.2 $34 $59 $75 (a) What is the index level at the old prices? The index level at the old prices is (b) If the stock prices change to the new prices, as noted in the table, what would the new index level be? The new index level at the new prices would be (c) Given the change between the old and new prices, what is the index return? Round your answer to 2 decimal places. The index return is (d) If Stock C conducted a 2 for 1 stock split, what should the new divisor be? Round your answer to 4 decimal places. The new divisor would be A- GH Attempts Do No Harm/4 8. A simple example of short positions Suppose that an investor seeks to take a short position on the stock of company XYZ and that the price of XYZ is currently $120. An investor would take a short position if they believe that the price of the stock will Suppose that an investor has taken a short position on 100 shares of XYZ (price-$120 per share). If the price of XYZ rises to $150 per share, the investor will experience a of (Hint: Ignore the interest costs of the loan.)

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Question 1 In this case you shorted 4000 shares of mortgage lender X at 50 with an initial margin requirement of 60 This means you initially deposited 60 of the total value of the short sale as margin ... View the full answer