Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

De Trader opens a brokerage account and purchases 100 shares of Internet Dreams at $58 per share. She borrows $2,200 from her broker to help

De Trader opens a brokerage account and purchases 100 shares of Internet Dreams at $58 per share. She borrows $2,200 from her broker to help pay for the purchase. The interest rate on the loan is 12%. a. What is the margin in Des account when she first purchases the stock? Margin $ b-1. If the share price falls to $48 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 %

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_2

Step: 3

blur-text-image_3

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

Short Term Financial Management

Authors: Ned C Hill

1st Edition

0023548207, 978-0023548208

More Books

Students also viewed these Finance questions

Question

Define Management by exception

Answered: 1 week ago

Question

Explain the importance of staffing in business organisations

Answered: 1 week ago

Question

What are the types of forms of communication ?

Answered: 1 week ago