The margin requirements are: Initial 50/Maintenance 40. Ignore interest.ABC shares trade at $60. You buy 200 shares at $60 per share in your margin account.Question 31The value of shares is $Question 32The margin is $....Question 33You will get the margin call when the stock price drops down to P = $

In trading broker gives margin to client for trading but there are cost to clients, but trading on…

Answered: The margin requirements are: Initial…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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A stock is currently selling for $40.00 a share. What is the gain or loss on the following transactions? Use a minus sign to enter the amount as a negative value. Round your answers to the nearest cent. a. You take a long position and the stock's price declines to $37.35. -10.65 b. You sell the stock short and the price declines to $37.35. 10.65 c. You take a long position and the price rises to $50.65. $ 2.65 d. You sell the stock short and the price rises to $50.65. -2.65
A stock is currently selling for $30.00 a share. What is the gain or loss on the following transactions? Use a minus sign to enter the amount as a negative value. Round your answers to the nearest cent. You take a long position and the stock’s price declines to $16.85. $ You sell the stock short and the price declines to $16.85. $ You take a long position and the price rises to $43.65. $ You sell the stock short and the price rises to $43.65.
Assume you sell short 100 shares of common stock at $30 per share, with initial margin at 50%. The maintenance margin is 35%. How far does the price of the stock rise for you to get a margin call? a) $33.33 b) $34.62 c) $32.14 d) $38.74 e) $40.50
You’ve borrowed $22,000 on margin to buy shares in Ixnay, which is now selling at $32 per share. Your account starts at the initial margin requirement of 50%. The maintenance margin is 30%. Two days later, the stock price falls to $22 per share. a. Will you receive a margin call? multiple choice No Yes b. How low can the price of Ixnay shares fall before you receive a margin call? (Round your answer to 2 decimal places.) Margin call will be made as price _______ or lower.
You purchased 200 shares of ABC common stock on margin at $60 per share. Assume the initlal margin is 50% and the maintenance margin is 30%. You will get a margin call if the stock drops below (Assume the stock pays no dividends and ignore interest on the margin loan.) Multiple Choice none of the above $35.71 $26.55 $28.95
You purchased 20 shares of ABC common stock on margin at $50 per share. Assume the initial margin is 50% and the maintenance margin is 30%. You initially have to put $. in your margin account. Type your answer.... (Continued) And, you will get a margin call if the stock price per share drops below $ Type your answer... (Assume the stock pays no dividends and ignore interest on the margin loan.) You sell short 300 shares of Microsoft which are currently selling at $30 per share. You post the 50% margin required on the short sale. If you earn no interest on the funds in your margin account your rate of return after one year is % if Microsoft is selling at $27. (Ignore any dividends) Type your answer.....
c. You purchased 100 shares of common stock on margin at $55 per share. Assume that the initial margin is 60%, with the maintenance margin of 35%. If the price moves to $40 per share, what would be the remaining equity margin in your account? Calculate the price at which there will be a margin call?
What about for these? (b) Suppose you have purchased some GameStop shares on margin at $5per share. You ask your broker to put in a limit sell order at $7, anda stop loss order at $4.50.i. What will happen if the stock price falls to $4.50?ii. What will happen if the stock price rises to $7?iii. Now suppose you had instead short-sold your GameStop shares(as in the first part of the question). What instructions mightyou give to your broker to minimise your losses and lock in yourgains?
You purchased 200 shares of a stock trading at $45 per share and used $6,000 of your own money and borrowed the rest. If the maintenance margin is 30%, how low can the stock go before you receive a maintenance call? Group of answer choices c. $40.55 d. $36.25 b. $33.75 a. $21.43
1. You purchase 100 shares for $50 a share ($5,000), and after a yearthe price rises to $60. What will be the percentage return on yourinvestment if you bought the stock on margin and the marginrequirement was? a.25 percent b.50 percent c.75 percent 2. Repeat Problem 1 to determine the percentage return on yourinvestment but in this case suppose the price of the stock falls to$40 per share. What generalization can be inferred from youranswers to Problems 1 and 2? 3. How many years will it take for 197000 dollars to grow to 554000 dollars if it is invested in an account with a quoted annual interest rate of 8 percent with monthly compounding interest?
You decide to enter a short-selling strategy with 100 shares. The current price is $70, initial margin 50% and maintenance margin 40%. What price would trigger a maintenance call? 85 75 65 80
You have 500 shares purchased at $ 87 per share A call with a delta of 0.7 and a strike of 87.50 sells for 0.90 (premium) A put with a delta of 0.50 and a strike of 85 sells fro 0.40 If you are LONG on the stock, Calculate on paper OR on a spreadsheet if your handwriting is illegible a delta neutral position. (how many puts and calls do you need) and what is the cost

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The margin requirements are: Initial 50/Maintenance 40. Ignore interest. ABC shares trade at $60. You buy 200 shares at $60 per share in your margin account. Question 31