Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Kathy Smith has a margin account with a balance of $60,000. Initial margin requirements are 60 percent, and Tesla stock is currently selling at $400

Kathy Smith has a margin account with a balance of $60,000. Initial margin requirements are 60 percent, and Tesla stock is currently selling at $400 per share. Based on this information, how many shares of Tesla can Kathy buy using the full margin? If stock price increases to $425 per share and Kathy closes her margin position, what will be rate of return on her investment? Show detail steps of calculations.

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

Finance For Non Financial Managers

Authors: Pierre Bergeron

6th Edition

0176501630, 9780176501631

More Books

Students also viewed these Finance questions

Question

=+ Where, how, why, and when are the products to be bought abroad?

Answered: 1 week ago