Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Given the close price of the stock Meituan (HKEX:3690) Date 18/02/2022 18/02/2022 21/02/2022 22/02/2022 23/02/2022 24/02/2022 25/02/2022 28/02/2022 01/03/2022 02/03/2022 03/03/2022 04/03/2022 07/03/2022 08/03/2022 09/03/2022

image text in transcribed

Given the close price of the stock Meituan (HKEX:3690) Date 18/02/2022 18/02/2022 21/02/2022 22/02/2022 23/02/2022 24/02/2022 25/02/2022 28/02/2022 01/03/2022 02/03/2022 03/03/2022 04/03/2022 07/03/2022 08/03/2022 09/03/2022 10/03/2022 Close Price $220.00 $188.00 $180.50 $171.30 $176.60 $170.20 $170.20 $172.20 $173.40 $176.40 $174.20 $164.80 $146.20 $145.50 $148.50 $144.20 Date 11/03/2022 14/03/2022 15/03/2022 16/03/2022 17/03/2022 18/03/2022 21/03/2022 22/03/2022 23/03/2022 24/03/2022 25/03/2022 28/03/2022 29/03/2022 30/03/2022 31/03/2022 01/04/2022 Close Price $135.40 $112.60 $106.00 $140.00 $157.20 $153.30 $143.90 $153.00 $156.20 $147.00 $135.00 $150.60 $159.30 $160.10 $155.60 $155.50 a) A Trader held HK$3,500,000 in margin account. He bought 10,000 shares of (HKEX:3690) Meituan at HK$220 on 18th February, 2022. Unfortunately, the stock price went down to HK$106 on 15th March, 2022. But., the price rebounded up to HK$155.6 at the end of March. i) When was the margin call made (the end of the day)? Date: / 1 dd 2 O 2 2 mm ii) How much extra money does he provide to bring the balance up to required level? (The administration cost was not considered) Extra money required for the margin call: b) The trader provide an extra $800,000 due to margin call and he sold out all shares at $146. He sold 6,000 shares (short sell) of (HKEX:3690) Meituan at HK$113 on 14th March, 2022. i) When was the margin call made again (the end of the day)? Date: 1 2 0 2 2 ii) What was the total money lost at the day of second margin call? Total lost: Given the close price of the stock Meituan (HKEX:3690) Date 18/02/2022 18/02/2022 21/02/2022 22/02/2022 23/02/2022 24/02/2022 25/02/2022 28/02/2022 01/03/2022 02/03/2022 03/03/2022 04/03/2022 07/03/2022 08/03/2022 09/03/2022 10/03/2022 Close Price $220.00 $188.00 $180.50 $171.30 $176.60 $170.20 $170.20 $172.20 $173.40 $176.40 $174.20 $164.80 $146.20 $145.50 $148.50 $144.20 Date 11/03/2022 14/03/2022 15/03/2022 16/03/2022 17/03/2022 18/03/2022 21/03/2022 22/03/2022 23/03/2022 24/03/2022 25/03/2022 28/03/2022 29/03/2022 30/03/2022 31/03/2022 01/04/2022 Close Price $135.40 $112.60 $106.00 $140.00 $157.20 $153.30 $143.90 $153.00 $156.20 $147.00 $135.00 $150.60 $159.30 $160.10 $155.60 $155.50 a) A Trader held HK$3,500,000 in margin account. He bought 10,000 shares of (HKEX:3690) Meituan at HK$220 on 18th February, 2022. Unfortunately, the stock price went down to HK$106 on 15th March, 2022. But., the price rebounded up to HK$155.6 at the end of March. i) When was the margin call made (the end of the day)? Date: / 1 dd 2 O 2 2 mm ii) How much extra money does he provide to bring the balance up to required level? (The administration cost was not considered) Extra money required for the margin call: b) The trader provide an extra $800,000 due to margin call and he sold out all shares at $146. He sold 6,000 shares (short sell) of (HKEX:3690) Meituan at HK$113 on 14th March, 2022. i) When was the margin call made again (the end of the day)? Date: 1 2 0 2 2 ii) What was the total money lost at the day of second margin call? Total lost

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

International Financial Management

Authors: Jeff Madura

11th Edition

0538482966, 9780538482967

More Books

Students also viewed these Finance questions