An investor shorts 1,000 shares of XYZ.com, a security eligible for reduced margin, at $48. The price of the stock drops to $45. What margin is required in the account after the drop in price? 1) $3,900 O2) $10,500 3) $24,000 4) $14,400
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- Suppose that you sell short 1,000 shares of Xtel, currently selling for $20 per share, and give your broker $15,000 to establish your margin account.a. If you earn no interest on the funds in your margin account, what will be your rate of return after one year if Xtel stock is selling at: (i) $22; (ii) $20; (iii) $18? Assume that Xtel pays no dividends.b. If the maintenance margin is 25%, how high can Xtel’s price rise before you get a margin call?c. Redo parts (a) and (b), but now assume that Xtel also has paid a year-end dividend of $1 per share. The prices in part (a) should be interpreted as ex-dividend, that is, prices after the dividend has been paid.H4 You sell short 18 shares of Wells Fargo &Co that are currently selling at $54 per share. You post the 0.56 margin required on the short sale. If your broker requires a 0.37 maintenance margin (MMR), at what stock price will you get a margin call? (You earn no interest on the funds in your margin account, and the firm does not pay any dividends.)An investor opens a margin account with an initial deposit of $5500. He then purchases 870 shares of a stock at $44. His margin account has a maintenance margin requirement of 30%. Ignoring commissions and interest, IF the price changed to 27 WHAT IS YOUR NEW EQUITY The correct answer is AT WHAT PRICE YOU WILL GET A MARGIN CALL PRICE?
- 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......Suppose that you sell short 1,000 shares of Xtel, currently selling for $20 per share, and give your broker $15,000 to establish your margin account. a.If you earn no interest on the funds in your margin account, what will be your rate of return after one year if Xtel stock is selling at: (i) $22; (ii) $20; (iii) $18? Assume that Xtel pays no dividends. b.If the maintenance margin is 25%, how high can Xtel’s price rise before you get a margin call? c.Redo parts (a) and (b), but now assume that Xtel also has paid a year-end dividend of $1 per share. The prices in part (a) should be interpreted as ex-dividend, that is, prices after the dividend has been paid.13.You sell short 340 shares of Doggie Treats Inc. Which are currently selling at $27 per share. You post the 52% margin required on the short sale. If your broker requires a 26% maintenance margin, at what stock price will you get a margin call? (You earn no interest on the funds in your margin account and the firm does not pay any dividends) Multiple Choice $56,57 $32.57 $22.57 $27.57
- You purchased 200 shares of ABC common stock on margin at $50 per share. Assume the initial margin is 50% and the maintenance margin is 30%. You will get a margin call if the stock drops below what price? (Assume the stock pays no dividends and ignore interest on the margin loan.)An initial margin required is 48% and maintenance of 55%. An investor buys GPH 9500 shares of stock of margin at TK 95.55 per share. The price of the stock subsequently drops to TK 47.60. a. Find the amount investor has to deposit for initiating the transaction. b.What is the actual margin at tk 56.56 share price is the account restricted? c.Show the amount of margin call is required to bring back account into operational at price of tk.53.90?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
- Suppose that you sell short 1000 shares of Xtel, currently selling for $50 per share, and give your broker $40,000 to establish your margin account. a. If you earn no interest on the funds in your margin account, what will be your rate of return after one year if Xtel stock is selling at: (i) $55; (ii) $50; (iii) $46? Assume that Xtel pays no dividends. (Leave no cells blank - be certain to enter "0" wherever required. Negative values should be indicated by a minus sign. Round your answers to 2 decimal places.) b. If the maintenance margin is 25%, how high can Xtel’s price rise before you get a margin call? (Round your answer to 2 decimal places.) c. Redo parts (a) and (b), but now assume that Xtel also has paid a year-end dividend of $2 per share. The prices in part (a) should be interpreted as ex-dividend, that is, prices after the dividend has been paid. (Negative values should be indicated by a minus sign. Round your answers to 2 decimal places.)You purchased 100 shares of ibm common stock on margin at $70 per share. Assume the initial margin is 50%, and the maintenance margin is 30%. below what stock price level will you get a margin call? assume the stock pays no dividend ;ignore interest rate on margin. A) $21 B) $40 C)$49 D) $80 E )$50An investor buys 100 shares of Altria at $82 per share on margin. The initial margin requirement is 50 percent, and the maintenance margin is 30 percent.a. The price of Altria drops to $61 per share. What is the actual margin now?b. The price of Altria declines further to $59.50. Show why a margin call is generated, or is not warranted.c. The price declines yet again to $55.25. Show by calculations why a margin call is generated.d. Using the information in (3), how much cash must be added to the account to bring it into compliance with the margin requirements?
