A trader has a margin account with total cash deposit of $20, 000. He bought 400 shares of a stock at the price of $100. If the minimum margin maintanance is 25%, what price of the stock today would lead to a margin call on his account? If withdraw is allowed at the margin ratio is above 50% after the withdraw, What price of the stock today would allow him to withdraw $2, 000 cash from the margin account?
A trader has a margin account with total cash deposit of $20, 000. He bought 400 shares of a stock at the price of $100. If the minimum margin maintanance is 25%, what price of the stock today would lead to a margin call on his account? If withdraw is allowed at the margin ratio is above 50% after the withdraw, What price of the stock today would allow him to withdraw $2, 000 cash from the margin account?
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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Long the asset in spot trade
A trader has a margin account with total cash deposit of $20, 000. He bought 400 shares
of a stock at the price of $100. If the minimum margin maintanance is 25%, what price
of the stock today would lead to a margin call on his account? If withdraw is allowed at
the margin ratio is above 50% after the withdraw, What price of the stock today would
allow him to withdraw $2, 000 cash from the margin account?
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