Question
2. Ms. Investor purchased 400 shares of WLP at a share price of $194.00 on January 7, taking full advantage of the 50% initial margin
2. Ms. Investor purchased 400 shares of WLP at a share price of $194.00 on January 7, taking full advantage of the 50% initial margin (40% maintenance margin). The stock initially went up, but has been declining steadily since late April. On April 9 WLP opened at 164.50 and closed at 158.80. 5 pts a. On February 5, WLP closed at $215.30 per share. What was the value of Ms. Investors equity after settlement on February 5? b. Will there be a margin call on April 9? If so, for how much? If not, explain/demonstrate why not. c. What is Ms. Speculators equity value after settlement on April 9? d. Suppose Ms. Investor would have sold all 400 shares of stock on February 5 when it closed at $215.30 per share. What would have been her return on investment?
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