Question
Dee Trader opens a brokerage account and buys 300 shares of Internet Dreams at RM40 per share. She borrows RM400O from her broker to help
Dee Trader opens a brokerage account and buys 300 shares of Internet Dreams at RM40 per share. She borrows RM400O from her broker to help pay for the shares. The broker chares an interest of 8%
a) What is the margin in Dees account when she first purchases the stock (3 marks)
b) If the share price fall to RM30 per share by the end of the year, what is the remaining margin her account? (3 marks)
c) If maintenance margin requirement is 30%, will she receive a margin call? (3 marks)
d) At what price will she receive a margin call? (3 marks)
e) What is the rate of return on her investment? (3 marks)
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