De Trader opens a brokerage account and purchases 300 shares of Internet Dreams at $34 per share. She borrows $4,400 from her broker to help
De Trader opens a brokerage account and purchases 300 shares of Internet Dreams at $34 per share. She borrows $4,400 from her broker to help pay for the purchase. The interest rate on the loan is 7%.
a. What is the margin in Des account when she first purchases the stock?
b. If the share price falls to $24 per share by the end of the year, what is the remaining margin in her account? (Round your answer to 2 decimal places.)
c. If the maintenance margin requirement is 30%, will she receive a margin call? Yes No
d. 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.)
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