MCQ ( Need Working)

Assume that you want to purchase 4 round lot shares of GP. The current share price of GP is $56. Your initial margin is 65%. Maintenance margin is 27%. GP pays half yearly dividend of $1 per share. For the borrowed amount you have to pay interest of 7% per annum. After 3 month you want to sell the shares for $62.

Question:

1. Find out transaction cost, equity and borrowed amount.

A) Transaction cost= 22,400, Equity = 7840, Borrowed Amount = 14560

B) Transaction cost= 22,400, Equity = 14560, Borrowed Amount = 7840

C) Transaction cost= 22,400, Equity = 8680, Borrowed Amount = 16120

D) Transaction cost= 22,400, Equity = 16120, Borrowed Amount = 8680

2. After 3 days of purchase if the share price increases by 5% what is the actual margin (approximate) and comment?

A) 66.67%,Restricted Account

B) 67.86%,Excess Account

C) 67.86% Margin Account

D) 66.66% Excess Account

3. After 5 days of purchase if the share price decreases by $30 what is the actual margin (approximate) and comment?

A) 24.61%,Margin call

B) 37.67%, margin call

C) 37.67% Excess Account

D) 24.61% Restricted Account