share. She owns RM15,000 to invest and the minimum initial margin requirement is 50%. She held the stock for exactly four months and sold it without any brokerage cost at the end of that period. During the four-month holding period, the stock paid RM1.50 per share in cash dividends. Amelia was charged 8% annual interest on the margin loan. The minimum maintenance margin was 30%. While her husband, Afiq prefer to trade in stock futures. Afiq are bearish on Sunway stock and decide to short sells 300 shares. The initial margin is 50%, and the maintenance margin is 35%. A year later, Sunway price has risen from RM25 to RM37, and the stock has paid a dividend of RM2.00 per share. Required:

share. She owns RM15,000 to invest and the minimum initial margin requirement is 50%. She held the stock for exactly four months and sold it without any brokerage cost at the end of that period. During the four-month holding period, the stock paid RM1.50 per share in cash dividends. Amelia was charged 8% annual interest on the margin loan. The minimum maintenance margin was 30%. While her husband, Afiq prefer to trade in stock futures. Afiq are bearish on Sunway stock and decide to short sells 300 shares. The initial margin is 50%, and the maintenance margin is 35%. A year later, Sunway price has risen from RM25 to RM37, and the stock has paid a dividend of RM2.00 per share. Required:

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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Sara Sanders purchased 50 shares of Apple stock at $190.28 per share using the prevailing minimum initial margin requirement of 56%. She held the stock for exactly 4 months and sold it without any brokerage costs at the end of that period. During the 4-month holding period, the stock paid $1.41 per share in cash dividends. Sara was charged 5.5% annual interest on the margin loan. The minimum maintenance margin was 25%. a. Calculate the initial value of the transaction, the debit balance, and the equity position on Sara's transaction. b. For each of the following share prices, calculate the actual margin percentage, and indicate whether Sara's margin account would have excess equity, would be restricted, or would be subject to a margin call: (1) $174.44, (2) $207.39, and (3) $122.81. c. Calculate the dollar amount of (1) dividends received and (2) interest paid on the margin loan during the 4-month holding period. d. Use each of the following sale prices at the end of the 4-month…
An investor purchases 1000 shares of a company at GHS20 per share using his own equity of GHS10,000 and borrowing the rest from his broker at 20% per annum. If all the shares were sold one year later at GH¢28.50, calculate (a) the amount of money borrowed from the broker (b) the return on his equity taking into consideration all brokerage fees paid amounting 2.5% of the value of investment both for buying and selling of investment. (c) Return on his investment.
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Dée Trader opens a brokerage account and purchases 100 shares of Internet Dreams at $58 per share. She borrows $2,200 from her broker to help pay for the purchase. The interest rate on the loan is 12%. Required:a. What is the margin in Dée’s account when she first purchases the stock? b. If the share price falls to $48 per share by the end of the year, what is the remaining margin in her account? c. If the maintenance margin requirement is 30%, will she receive a margin call?multiple choice Yes No Correct d. What is the rate of return on her investment? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.) Dée Trader opens a brokerage account and purchases 100 shares of Internet Dreams at $58 per share. She borrows $2,200 from her broker to help pay for the purchase. The interest rate on the loan is 12%. Required:a. What is the margin in Dée’s account when she first purchases the stock? b. If the share price falls to…
George bought 1,500 shares of stock LCC on March 7 at Php12. On June 3 of the same year, he sold these shares at Php14.50. If the broker's commission, transaction fees and taxes total 0.255% when buying, how much was George's total cash out in buying the 1,500 LCC shares?
Sam bought through her broker 200 Apex Mining common stock at $61.50/share. The broker charged her 2% commission. One year later she sold the shares for $71.25. What are the proceeds for this stock market transaction?
Sam bought through her broker 200 Apex Mining common stock at $61.50/share. The broker charged her 2% commission. One year later she sold the shares for $71.25. What is total cost of buying the stock?
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