Assume that you will buy stock on margin (i.e.; stock margin trading). Assume that Texas Instruments Corp stock is currently selling for $50 per share. Assume that you will purchase 500 shares on July 29, 2002 at 11:00 AM. You have $15,000 of your own to invest and you will borrow an additional $10,000 from your broker at an interest rate of 10% per year. Assume that the Maintenance Margin is 40%.

16) What is the initial position (on July 29, 2002 at 11:00 AM.) using the balance sheet equation. In other words, which of the following presents the balance sheet using this information.

a. ASSETS LIAB & OWN EQUITY

Stock $25,000 Liab $15,000

Equity $10,000

b. ASSETS LIAB & OWN EQUITY

Stock $25,000 Liab $10,000

Equity $15,000

c. ASSETS LIAB & OWN EQUITY

Stock $15,000 Liab $0

Equity $15,000

d. ASSETS LIAB & OWN EQUITY

Stock $25,000 Liab $11,000

Equity $ 14,000

e. none of the above