Question: kindly answer all the questions please, if not please dont take the question thanks! 1.You borrow $20,000 and buy 1000 shares of Facebook at $50
kindly answer all the questions please, if not please dont take the question thanks!
1.You borrow $20,000 and buy 1000 shares of Facebook at $50 per share on margin. The interest on the loan is 10%. One year from now the price is $53. Assume no dividends are paid. What is your final margin?
| 49.5% | ||
| 52.5% | ||
| 55% | ||
| 58.5% | ||
| None of the above |
2. An investor invests 50% of her wealth in the market portfolio with an expected rate of return of 12% and a standard deviation of 20%, and she puts the rest in Treasury bills that pay 2% per year. What is the variance of the portfolio?
| 0.01 | ||
| 0.04 | ||
| 0.1 | ||
| 0.2 | ||
| None of the above |
3.
You short-sell 10 shares of Amazon.com, Inc today with a 40% margin. The stock price is $2,000 per share. What is your maximum rate of return for this trade when you cover your position in the future (ignoring transactions costs)?
| 40% | ||
| 60% | ||
| 200% | ||
| 250% | ||
| Unlimited |
4.
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On Jan 1, you sold short 500 shares of Tencent at $60 per share. You post $12,000 to the margin account. On April 1, you received a margin call on this trade. Assume the minimum margin requirement is 30%, what is the price of the stock that triggered the margin call?
$58.26
$60.97
$61.35
$64.62
None of the above
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