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A trader opens a brokerage account and purchases 500 shares of HVN stock at $20 per share. She borrows $4000 from her broker to help
A trader opens a brokerage account and purchases 500 shares of HVN stock at $20 per share. She borrows $4000 from her broker to help pay for the purchase. The interest rate on the loan is 7%. (a) what is the margin in trader's account when she first purchases the stock? (b) If the price falls to $18 per share by the end of the year, what is the remaining margin in her account? If the maintenance margin requirement is 30%, will she receive a margin call? (c) What is the rate of return on her investment? (d) What is the margin call price and how much would be the margin call amount
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