Eleanor Michaels believes that the price of Continental Metals stock will go up. Its current price is
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Question:
Eleanor Michaels believes that the price of Continental Metals stock will go up. Its current price is $35.45 per share and she has $3,000 to invest.
How many shares may she purchase with a cash brokerage account?
How many may she purchase using a margin brokerage account with a 60% margin requirement?
If the per share price is $38.45 three months later when she sells the shares, what is her quarterly yield in each case? Assume that there are no dividends and that in the case of the margin account, Eleanor deposits exactly $3,000 and interest charged to Eleanor for the three months reduces the funds received by $30.
Related Book For
Data Analysis and Decision Making
ISBN: 978-0538476126
4th edition
Authors: Christian Albright, Wayne Winston, Christopher Zappe
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