has just opened a brokerage account at FOREX investment company. He planned to trade on Adidas Co, stocks. He decided to buy 50 shares at the current stock price of $209/share. The broker advised her to borrow at 5% interest rate and additionally required the following margin requirements: Initial 65% Maintenance 25% Considering that the Adidas stock price has increased by 22.5% reaching $256.025, will Mark's broker send her a margin call? * A) No, since the maintenance margin is less than the margin rate B) No, since the maintenance margin is more than the margin rate C) Yes, since the maintenance margin is less than the margin rate D) Yes, since the maintenance margin is more than the margin r
has just opened a brokerage account at FOREX investment company. He planned to trade on Adidas Co, stocks. He decided to buy 50 shares at the current stock price of $209/share. The broker advised her to borrow at 5% interest rate and additionally required the following margin requirements: Initial 65% Maintenance 25% Considering that the Adidas stock price has increased by 22.5% reaching $256.025, will Mark's broker send her a margin call? * A) No, since the maintenance margin is less than the margin rate B) No, since the maintenance margin is more than the margin rate C) Yes, since the maintenance margin is less than the margin rate D) Yes, since the maintenance margin is more than the margin r
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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Mark Aziz has just opened a brokerage account at FOREX investment company. He planned to trade on Adidas Co, stocks. He decided to buy 50 shares at the current stock price of $209/share. The broker advised her to borrow at 5% interest rate and additionally required the following margin requirements:
Initial 65%
Maintenance 25%
Considering that the Adidas stock price has increased by 22.5% reaching $256.025, will Mark's broker send her a margin call? *
A) No, since the maintenance margin is less than the margin rate
B) No, since the maintenance margin is more than the margin rate
C) Yes, since the maintenance margin is less than the margin rate
D) Yes, since the maintenance margin is more than the margin rate
E) None of the above
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