Suppose you borrow to finance 25% of the purchase of 100 unit of defaultable zero coupon...
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Suppose you borrow to finance 25% of the purchase of 100 unit of defaultable zero coupon bonds with a current price of $840 per unit. If the maintenance margin is 30%, one week later at what bond price will you receive a margin call? (Ignore interest on the loan) Suppose you borrow to finance 25% of the purchase of 100 unit of defaultable zero coupon bonds with a current price of $840 per unit. If the maintenance margin is 30%, one week later at what bond price will you receive a margin call? (Ignore interest on the loan)
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To calculate the bond price at which you will receive a margin call one week later we need to consid... View the full answer
Related Book For
Fundamentals Of Corporate Finance
ISBN: 9780135811603
5th Edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
Posted Date:
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