Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Margin $: Your margin account requires an initial margin of 50%, and a maintenance margin of 30%. You deposit $74,000 cash in a brokerage account

Margin $: Your margin account requires an initial margin of 50%, and a maintenance margin of 30%. You deposit $74,000 cash in a brokerage account and purchase stocks using all available margin and borrowing the rest from your broker. Later, the value of your stock holdings goes to $107,000. What is your dollar return?

$74,000 Gain

$33,000 Gain

$41,000 Loss

$41,000 Gain

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

Fundamentals Of Multinational Finance

Authors: Michael Moffett

6th Global Edition

1292215216, 978-1292215211

More Books

Students also viewed these Finance questions