Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Margin Trading An investor opens her first brokerage account, and purchases 500 shares of Cisco shares at $24 per share. She borrows $5,000 from her

Margin Trading An investor opens her first brokerage account, and purchases 500 shares of Cisco shares at $24 per share. She borrows $5,000 from her broker to help pay for the purchase. The interest rate of the loan is 3.5%. What is the initial margin in her account when she first purchases the stock? If the price falls to $20 per share by the end of the year, what is the remaining margin in her account?If the maintenance margin requirement is 35%, will she receive a margin call? What is the rate of return on the investment if she sells the shares at the end of the year at $20 per share?

I know Part A: 58.33%

Part B: Chegg keeps getting the wrong answer. It is NOT ..

https://www.chegg.com/homework-help/questions-and-answers/margin-trading-investor-opens-first-brokerage-account-purchases-500-shares-cisco-shares-24-q14734855

Please Help. I have test and need major help explaining

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

Supernatural Provision Living In Financial Freedom

Authors: Joan Hunter, Sid Roth

1st Edition

1641238232, 978-1641238236

More Books

Students also viewed these Finance questions

Question

Explain the importance of Human Resource Management

Answered: 1 week ago

Question

Discuss the scope of Human Resource Management

Answered: 1 week ago

Question

Discuss the different types of leadership

Answered: 1 week ago

Question

Write a note on Organisation manuals

Answered: 1 week ago