Question: How to calculate this problem? Amanda has a Long position in IBM. She bought 35.35 shares and had a broker loan of $1,319.83. The initial

How to calculate this problem?

Amanda has a Long position in IBM. She bought 35.35 shares and had a broker loan of $1,319.83. The initial margin is 53.47% and the maintenance margin is 26.19%. Assume that the price of IBM follows a normal distribution with mean 129.97 and standard deviation 34.11. Assume 0 interest rate on the broker loan. If the price of IBM is in the lowest 2.28% of the distribution, does Amanda receive a margin call? Type 1 if Yes, 0 if no

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Amanda has a long position in IBM. She bought 35.35 shares and had a broker loan of $1,319.83. The initial margin is 53.47% and the maintenance margin is 26.19%. Assume that the price of IBM follows...

Amanda has a Long position in IBM. She bought 35.57 shares and had a broker loan of $996.20. The initial margin is 59.69% and the maintenance margin is 44.02%. Assume that the price of IBM follows a...

Amanda has a Long position in IBM. She bought 51.63 shares and had a broker loan of $1,927.33. The initial margin is 61.30% and the maintenance margin is 40.45%. Assume that the price of IBM follows...

Amanda has a Long position in IBM. She bought 34.68 shares and had a broker loan of \$972.25. The initial margin is 53.96% and the maintenance margin is 24.00%. Assume that the price of IBM follows a...

Amanda has a long position in IBM. She bought 49 shares and had a broker loan of $676.38. The initial margin is 61.41% and the maintenance margin is 25.53%. Assume that the price of IBM follows a...

Amanda has a Long position in IBM. She bought 44 shares and had a broker loan of $1,035.74. The initial margin is 55.84% and the maintenance margin is 31.34%. Assume that the price of IBM follows a...

Q.2 Fal 20e3 Sensester - (3) You are given the following information: 2 1 Im Meetings Everywhere ickly Attendance The risk-free rate is 2%. Compute the M2 of stock A anto Course: terials 3 crosoft...

set 1_Investment.pdf 1. A young couple has made a nonrefundable deposit of the first months rent (equal to $1000) on a 6Emonth apartment lease. The next day they find a different apartment that they...

Explain the difference between a point estimate of a parameter and a confidence-interval estimate of a parameter.

Describe how blanket orders and blanket order releases can be used to manage the procurement system of a business that owns a dozen large restaurants in a city.

You are the budgeting analyst for Roberts and company. The president has asked you to create an expense budget for the sales department. The sales department is located in another office building, as...

1) "When there is no budgetary constraint and projects are independent, then pick all positive NPV projects" Question 14 options: True or False 2) "When there is no budgetary constraint and projects...