Question: PLEASE ANSWER SUB-QUESTION (d.) Part B: Short Answer Questions (20 marks) A) You have a margin account with Local Bank and deposits RM24,000. The prevailing

PLEASE ANSWER SUB-QUESTION (d.)

Part B: Short Answer Questions (20 marks) A) You have a margin account with Local Bank and deposits RM24,000. The prevailing margin requirement is 60 percent. Goodhealth's share is currently selling at RM5 per share. a. How many Goodhealth's shares can you purchase if you pay cash? (1 mark) b. How many shares can you purchase using the maximum allowable margin? (1 mark) c. What is your profit (loss) in amount and percentage if you pay cash to purchase, if the price of Goodhealth's shares: i. rises to RM6? ii. falls to RM3? (4 marks) d. What is your profit (loss) in amount and percentage if you purchase using maximum allowable margin, if the price of Goodhealth's shares: i. rises to RM6? ii. falls to RM3? (4 marks)

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