Question: You have access to a margin account with an initial margin of 50%. You are interested in buying shares of a stock that is trading

You have access to a margin account with an initial margin

You have access to a margin account with an initial margin of 50%. You are interested in buying shares of a stock that is trading at $80, and you only have $2000 to invest. Fully utilizing your margin account, what is the maximum number of shares that you can buy? a) 12.5 b) 500 c) 25 d) 100 e) 50

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!

Superstar Ice Rinks Inc. (SIR) is a privately owned company owned by a group of investors headed by James T. Kirk, a retired professional hockey player. SIR owns three arenas in suburban areas near a...

1. A margin account requires an initial margin of 50% and a margin call will occur if the stock price depreciates to $13.33. If stocks were initially purchased at $20, the maintenance margin is...

please show work and any formulas used 4. Define the concepts of Minimum Margin and Maintenance Margin a. Now assume that your margin account requires an initial margin of 50%, and a maintenance...

a. Now assume that your margin account requires an initial margin of 50%, and a maintenance margin of 40%. A Share in JMX is selling for $80. You have $40,000, and you want to buy as much WHOA as you...

1.An investor purchased 500 shares of Akley common stock for $42,000 in a margin account and posted initial margin of 50%. The maintenance margin requirement is 30%. The price of Akley, below which...

1. If an insider cannot take advantage and trade on private information to make abnormal profits , then a market is likely to be considered A. Weak form efficient and Semi strong form efficient only...

An investor purchased 500 shares of Akley common stock for $42,000 in a margin account and posted initial margin of 50%. The maintenance margin requirement is 30%. The price of Akley, below which the...

You have $21,000 in your brokerage account, and just bought 200 shares of Stock, that is currently selling for $128. Your margin account has an initial margin of 50% and a maintenance margin of 30%....

The stock of APPL sells $190 per share (Latest Close Price) on June 13th, 2023. The rate on Treasury bills is 1.4%. Suppose an analyst at Morgan Stanley just announced the following forecast on the...

The stock of APPL sells $190 per share (Latest Close Price) on June 13 th , 2023. The rate on Treasury bills is 1.4%. Suppose an analyst at Morgan Stanley just announced the following forecast on the...

Problem 15: Investment mechanism and expected returns/risks (36\%) The stock of APPL sells $190 per share (Latest Close Price) on June 13th,2023. The rate on Treasury bills is 1.4%. Suppose an...

Wilbur owns 600 of 1,000 outstanding shares of Dayton Airplane and Bicycle Corporation (Dayton). Wilbur acquired 400 shares for $50,000 approximately 20 years ago and 200 shares late last year for...

Find 3x y lim (x, y)(0, 0) x + y if it exists.

Find the points on the lemniscate where the tangent is horizontal. ( Order your answers from smallest to largest x , then from smallest to largest y . ) 8 ( x 2 + y 2 ) 2 = 8 1 ( x 2 y 2 )

A service station has one gasoline pump. Cars wanting gasoline arrive according to a Poisson process at a mean rate of 15 per hour. However, if the pump already is being used, these potential...

The Brady & Matthew Camera Company has just come out with their newest professional quality digital camera, the ToughPix1. The company is selling this camera only through its new mobile app at a...

Trickle bed reactors is widely used in the oil industry because of the advantages offered. In a trickle bed reactor, the oxidation of ethanol is to be carried out. The reaction is first order with...

20. What is the IPv6 address of the computer making the DNS AAAA request? This is the source address of the 20th packet in the trace. Give the IPv6 source address for this datagram in the exact same...

You're the pricing product manager for Lyft's ride-scheduling feature, and you're launching a new city --Toledo. The prevailing rate that people are used to paying for rides from the airport to...

International marketers consolidate their advertising with one agency in order to

You are taking an online college class and have been offered the final exam from a student who printed a copy for you after taking the exam yesterday. The correct answers are not on the test copy....

3. When asked for advice for future entrepreneurs, Vickie Stringer said, Be patient, allow room for growth, build your company on a strong accounting system, and as always, dare to dream. How does...

1. In the bright light of hindsight, most of us would probably say we would blow the whistle on these instances had we been a witness to them, especially because there was so much money involved. But...