Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Am. 357.

The stock price of Google is $589. You have $10,000 saved in a savings account. The monthly interest rate is 0.2%.
You think the stock price will go down soon, and want to trade 20 shares. What should you do? Enter 20 for buying 20
shares (on margin if necessary), or -20 for selling or short-selling 20 shares.
If the initial margin is 50%, what is the minimum additional dollar amount that you have to deposit in your brokerage
account?
What is your initial percentage margin (entered as a decimal number) once you've completed the deposit calculated in
part 2?
Two months later, the stock price is $609. Google paid a dividend of $7 per share just before the two months were over.
What is your percentage margin (entered as a decimal number)?
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Transcribed Image Text:The stock price of Google is $589. You have $10,000 saved in a savings account. The monthly interest rate is 0.2%. You think the stock price will go down soon, and want to trade 20 shares. What should you do? Enter 20 for buying 20 shares (on margin if necessary), or -20 for selling or short-selling 20 shares. If the initial margin is 50%, what is the minimum additional dollar amount that you have to deposit in your brokerage account? What is your initial percentage margin (entered as a decimal number) once you've completed the deposit calculated in part 2? Two months later, the stock price is $609. Google paid a dividend of $7 per share just before the two months were over. What is your percentage margin (entered as a decimal number)?
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