Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1 3 . You have a trading account with 1 0 , 0 0 0 shares of a stock that last traded yesterday at $

13. You have a trading account with 10,000 shares of a stock that last traded yesterday at $9.20. To open this position you took a broker loan of $30,000 last year at a rate of 7%. Knowing that the maintenance margin is 25% and given you expect the stock to fall by 3% today, what is the most you may withdraw from this account without expecting to trigger a margin call?
A) $10,700
B) $22,310
C) $32,100
D) $42,800
E) $46,440

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Management Principles and Applications

Authors: Sheridan Titman, Arthur Keown, John Martin

12th edition

133423824, 978-0133423822

More Books

Students also viewed these Finance questions

Question

What is cultural tourism and why is it growing?

Answered: 1 week ago