Question
De Trader opens a brokerage account and purchases 100 shares of Internet Dreams at $60 per share. She borrows $2,000 from her broker to help
De Trader opens a brokerage account and purchases 100 shares of Internet Dreams at $60 per share. She borrows $2,000 from her broker to help pay for the purchase. The interest rate on the loan is 10%.
a. What is the margin in Des account when she first purchases the stock?
Margin $
b-1. If the share price falls to $50 per share by the end of the year, what is the remaining margin in her account? (Round your answer to 2 decimal places.)
Remaining margin %
b-2. If the maintenance margin requirement is 30%, will she receive a margin call?
Yes | |
No |
c. What is the rate of return on her investment? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)
Rate of return %
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