Question: Question 3 (8 points) Security 1 is presently trading for 38.38. You decide to purchase 1,000 shares. Security 2 is presently trading for 88.11 and

Question 3 (8 points) Security 1 is presently trading for 38.38. You decide to purchase 1,000 shares. Security 2 is presently trading for 88.11 and you decide to purchase 1,150 shares. Suppose you have an IMR of 50% and an MM of 25%. Interest on any borrowed funds will be charged 8% APR, monthly compounding, and you intend to utilize your margin to capacity. There is no brokerage fee to short, and you do not earn any interest on cash deposited. All your accounts are aggregated. Exactly 3 months from now, you notice that Security 1 is trading for 86.43 and Security 2 is trading for 78.89. What will the equity in your account be at this time? Round to 4 decimal places, as 110.545.6322 for exam ple. Show all your work in order to receive credit

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 Finance Questions!

Three bars, each of mass 3 kg, are welded together and pin-connected to two links BE and CF. Neglecting the weight of the links, determine the force in each link immediately after the system is...

Security 1 is presently trading for 88.38. You decide to purchase 1,000 shares. Security 2 is presently trading for 88.17, and you decide to purchase 1,150 shares. Suppose you have an IMR of 50% and...

only # 4 Dental costs associated with this transaction Question 3 (10 Points) Dahlgren believes that if Swedish Match moves forward with the transaction it would likely receive a credit rating of 888...

1 question! Question 3 (10 Points) Dahlgren believes that if Swedish Match moves forward with the transaction it would likely receive a credit rating of BBB by S&P. Do you share Dahlgren's view or...

GUARANTEED LIKE THIS SHOULD BE BETTER Question 3 (10 Points) Dahlgren believes that if Swedish Match moves forward with the transaction it would likely receive a credit rating of BBB by S&P. Do you...

Question 3 (10 Points) Dahlgren believes that if Swedish Match moves forward with the transaction it would likely receive a credit rating of BBB by S&P. Do you share Dahlgrens view or not? Explain...

GUARANTEED LIKE this should be better !!! also try zooming in Question 4 (15 Points) Assuming that Dahlgren is correct in that Swedish Match will receive a credit rating of BBB if it moves forward...

GUARANTEED LIKE Question 5 (15 Points) Assuming that Dahlgren is correct in that Swedish Match will receive a credit rating of BBB if it moves forward with the transaction. Answer the following: What...

only #6!!! all future interest tax shields from issuing the perpetual bond. Question 5 (15 Points) Assuming that Dahlgren is correct in that Swedish Match will receive a credit rating of BBB if it...

ONLY # 5 te some of the metrics in Exhibit 5 for Swedish proposed financial policy.) Question 4 (15 Points) Assuming that Dahlgren is correct in that Swedish Match will receive a credit rating of BBB...

BACKGROUND An SM bond is a 35-year Australian government bond with a face value of $1. They are marketed to consumers saving for retirement (who buy the S part) and investors (who buy the M part)....

Estimate the binding energy of a KC1 molecule by calculating the electrostatic potential energy when the K+ and CI ions are at their stable separation of 0.28nm. Assume each has a charge of magnitude...

Compiler and change the dialect to ISO C++11 (-std=c++11). How to I fix my eclipse to run thread? This is the code I am trying to run: #include #include int counter = 0; void countDown () { while...

All of the following are excluded from FUTA coverage except a . school teachers. b . insurance agents or solicitors paid solely on a commission basis. c . members of partnerships. d . grocery store...

please Quary Company is considering an investment in machinery with the following information Initial investment $ Materials, labor, and overhead (except 227,000 depreciation) Useful life 9 years...