Question: the answer for 23 is option c. then how to solve question 24 ? 23. You purchased 100 shares of ABC common stock on margin
the answer for 23 is option c. then how to solve question 24 ?
23. You purchased 100 shares of ABC common stock on margin at $70 per share. Assume the initia margin is 50% and the maintenance margin is 30%. Below what stock price level would you get a margin call? Assume the stock pays no dividend; ignore interest on margin. A. $27 B. $50. C. $60 D. $80 24. Regarding the previous question, if the stock price declines to $50 per share, what's the return to the investor's equity? What if the stock rises to $100 per share? Ignoring the interest and transactions costs. A. 57.1% and 85.7% B. -57.1% and 85.9% C. 57.4% and -85.7% D. -57.1% and 85.7%
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