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Lauren has a margin account and deposits $30,000. Assume the prevailing margin requirement is 50 percent, commissions are ignored, and the Gentry Wine Corporation
Lauren has a margin account and deposits $30,000. Assume the prevailing margin requirement is 50 percent, commissions are ignored, and the Gentry Wine Corporation is selling at $40 per share. a. How many shares can Lauren purchase using the maximum allowable margin? Round your answer down to the nearest whole share, if necessary. shares b. What is Lauren's profit (loss) if the price of Gentry's stock 1. rises to $457 Use a minus sign to enter loss, if any. Round your answer to the nearest dollar. Use the rounded value of the number of shares from part a. $ ii. falls to $35? Use a minus sign to enter loss, if any. Round your answer to the nearest dollar. Use the rounded value of the number of shares from part a. c. If the maintenance margin is 40 percent, to what price can Gentry Wine fall before Lauren will receive a margin call? Round your answer to the nearest cent. Use the rounded value of the number of shares from part a.
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