Question: Margin Trading Exercise 1-1) Suppose that the initial margin is 50%. You are buying 200 shares of ABC securities at $30/share. How much money do

Margin Trading Exercise

1-1) Suppose that the initial margin is 50%. You are buying 200 shares of ABC securities at $30/share. How much money do you have to provide?

1-2) If the price decreases to $20, what is the margin (%) now?

1-3) If you sell at a price of $20 one year from now and the margin interest rate is 10%, what is your rate of return?

1-4) The maintenance margin is 15%. At what price would you have a margin call?

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