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need help getting to these answers! thanks in advance 18.(10 points) You are bullish on Boeing stock (BA). You decide to purchase 400 shares of
need help getting to these answers! thanks in advance 18.(10 points) You are bullish on Boeing stock (BA). You decide to purchase 400 shares of BA on margin. The current price of BA is $45 per share and initial margin requirements for your broker are 50%. (assume that you put up the minimum required initial margin) a. (6 points) Immediately after you purchase, BA rises to $52 per share. Calculate YOUR holding period return AND the new margin level in your account (express your answer for margin in percentage terms). HPR = 31.11% New Margin Level = 56.73% b. (4 points) Assume that you hold onto your position for one year and that your broker charges a call loan rate of K%. At what price will you be subject to a margin call? Price = $34.71 18. (10 points) You are bullish on Boeing stock (BA). You decide to purchase 400 shares of BA on margin. The current price of BA is $45 per share and initial margin requirements for your broker are 50%. (assume that you put up the minimum required initial margin). a. (6 points) Immediately after you purchase, BA rises to $52 per share. Calculate YOUR holding period return AND the new margin level in your account (express your answer for margin in percentage terms). HPR= 31.11% New Margin Level = 56.73% I b. (4 points) Assume that you hold onto your position for one year and that your broker charges a call loan rate of 8%. At what price will you be subject to a margin call? Price =$34.71
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