Question: Finance 4200 Class Problem Margined Long Position Name: Date: Suppose that an investor buys 300 shares on margin at S40 per share. The initial margin
Finance 4200 Class Problem Margined Long Position Name: Date: Suppose that an investor buys 300 shares on margin at S40 per share. The initial margin is 50% and the maintenance margin is 30%. After one year, the investor sells the shares for $38 and closes the long position. During the holding period, the shares paid a dividend of $1.30 per share. Interest on the margin loan is 7% annual. Show the calculations for the numbers you enter in the "Taccounts. a. Show the investor's beginning "T" account. At what price would this investor receive a margin call? (calcs here) b. Show the investor's "T" account at the share price of $38. What is the actual margin at this price? (calcs. here) c. Calculate the investor's return for the holding period
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