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

image text in transcribed

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%. Required: a. What is the margin in De's account when she first purchases the stock? Margin b. If the share price falls to $48 per share by the end of the year, what is the remaining margin in her account? Remaining margin c. If the maintenance margin requirement is 30%, will she receive a margin call? Yes O No d. What is the rate of return on her investment? (Negative value should be indicated by a minus sign. Round answer to 2 decimal places.) your 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

Step: 3

blur-text-image

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

Investments

Authors: Zvi Bodie, Alex Kane, Alan J. Marcus

9th Edition

73530700, 978-0073530703

More Books

Students also viewed these Accounting questions

Question

Acts that are crimes because they are inherently evil

Answered: 1 week ago