Question
NINE months ago, you purchased 500 shares of stock on margin. The initial margin requirement on your account is 60% and the maintenance margin is
NINE months ago, you purchased 500 shares of stock on margin. The initial margin requirement on your account is 60% and the maintenance margin is 40%. The call money rate is 3.5% and you pay 1.2% above that rate. The purchase price was $15 per share. Today, you sold these shares for $18 each.
QUESTION #1. Your new margin is
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QUESTION #2. Your effective annual return (EAR) is
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QUESTION #3. Suppose you sold the stock at $14 per share, instead of $18 per share. The new margin would be
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and you
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have received a
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