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INVESTMENTS AND FUND. ANALYSIS Mr. Bora who is very optimistic about the future earnings of Halkbank ( a bank stock trading in Borsa Istanbul) bought
INVESTMENTS AND FUND. ANALYSIS
- Mr. Bora who is very optimistic about the future earnings of Halkbank ( a bank stock trading in Borsa Istanbul) bought 1000 shares of Halkbank at the price of 5.2 TL per share. He then decided to borrow a loan from his brokerage house in order to buy additional shares of Halkbank
- What is the maximum amount of the loan he can get?
- Supposing that he gets that maximum amount of loan; what will be his initial margin ratio?
- Suppose the price of Halkbank is up to 7.4 TL /share after four months. What will be Mr. Boras net profit (in all stocks he bought) given that the annual interest rate on such loans is 15%?
- Suppose that the price of Halkbank is down to 2.9 TL after one month. What will be the margin ratio on that day? If the maintenance ratio is 0.35; will he receive a margin call? If so; how much addtional money he must deposit?
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Introduction to Corporate Finance What Companies Do
Authors: John Graham, Scott Smart
3rd edition
9781111532611, 1111222282, 1111532613, 978-1111222284
