Question: Suppose, the initial margin is 40%, and you are buying 100 shares at $20/ share, a) how much money do you have to have to

Suppose, the initial margin is 40%, and you are buying 100 shares at $20/ share, a) how much money do you have to have to provide? b) If the price increases to $30, what is the margin now? (Margin refers to the part not borrowed) (Margin =( Current value of securities Amount borrowed ) (Current value of securities)) c) If the maintenance margin is 10%. At what price would you have a margin call

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!

A Treasury bond reaches maturity in 9 months. Assume that the Treasury bond has a coupon of 3% and the current price of the bond is $99,500. a. Estimate the bonds yield to maturity (based on...

HELP! I need a professional tutor to HELP me solve these 8 problems I have a TEST coming up and I have NO CLUE how to do these. I have the answers on the bottom but that will do me no good for the...

You are interested to invest in the financial market. You set your Investment Policy Statement with your full - service broker, and decided to start as follows: 1 ) If the initial margin is 5 0 % ,...

Problem 1. You learn from the newspaper that Dah Chong Hong Holdings Ltd (Stock code: 1828) is going to list in HK on October 17, 2007. The offering price (the IPO price) range will be somewhere...

Suppose you buy shares of a stock worth OMR20000, and the initial margin is 60% and the maintenance margin is 30%. Suppose the interest rate you must pay is 6% on the borrowed money. Answer the...

Assignment Questions 1. Give a decriptive introduction about the different types of brockarage accounts and how trading take place in cach accounts. 2. Assume you buy 200 shares of stock and the...

14. Which refers to the worst price a trader is willing to accept? a. Bid b. Ask c. Depth 15. A limit order specifies both a price and number of shares a. True b. False 16. NBBO stands for a. No...

I open a brokerage account, deposit $2,000, and get cleared to do margin trading (which is also necessary for short sales). I short 100 shares of PBYI, which has a price of $20. What is my initial...

QUESTION 9 The price quotations of Treasury bonds show a bid price of 105.5121 and an ask price of 105.5782. If you wish to sell a Treasury bond, how much you expect to receive OA $1,000.00 OB. $...

If the initial margin is 50%, and you are buying 200 shares at P30/share, a. how much money do you have to have to provide? b. If you sell at a price of P20 one year from now and the margin interest...

Penelope would like to short-sell 100 shares in Hardwood Ltd as she believes the prices are going to fall. The initial margin is 40 percent and Hardwood Ltd sells at $46 per share. How much money...

The following information was extracted from the 1998 annual report of AT&T Corporation (all dollar amounts are in millions): ¢ 1998 data reflect $2.5 billion of pretax business restructuring...

For tetragonal crystals, cite the indices of directions that are equivalent to each of the following directions: (a) [001] (b) [110] (c) [010]

The transaction type for customer payments received on account is Sales Receipt. True False

Find the radius of gyration of a plate covering the region bounded by x=3, x=5, y=0, and y=4 with respect to the y-axis.

d. If you could relive the situation, would you do anything differently? Explain.

1. Many inspirational speakers attempt to take the audience on an emotional journey. They try to erase cynicism and complacency and get employees fired up about their jobs. Do you think organizations...

2. Benoit Vincent was able to become a more effective manager after completion of certain personality profile instruments (the MBTI for example), participating in a series of one-on-one workplace...