1. Jack has a margin account with a 60% initial margin requirement and a 35% maintenance margin. What is the maximum dollar amount of stock she can purchase if her cash balance in the account is $35,300?
2. You recently purchased 900 shares of Western Timber Stock for $38 a share. Your broker required a cash payment of $25,650, plus trading costs, for this purchase. What was the initial margin requirement?
3. You purchased 1,000 shares of stock at $42 a share. The stock is currently selling for $45 a share. The initial margin was 70% and the maintenance margin is 30%. What is your current margin position?
4. Allan purchased 800 shares of stock on margin for $31 a share and sold the shares five months later for $33.50 a share. The initial margin requirement was 65% and the maintenance margin was 30%. The interest rate on the margin loan was 7.5%. He received no dividend income. What was his holding period return?
5. Stacy purchased 400 shares of stock for $38 a share. She sold those shares six months later for $34 a share. The initial margin requirement is 80% and the maintenance margin is 40%. Ignore margin interest and trading costs. If she purchased the shares for cash, her holding period return would be _________% as compared to __________% is she had used margin.