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please solve all questions. im checking to see if my own work is correct 1. you wish to buy a stock on margin. If you
please solve all questions. im checking to see if my own work is correct
1. you wish to buy a stock on margin. If you have $9600 to invest and the initial margin requirement is 50%. The maintenance margin is 40%. IVS is selling for $60 per share now. (1) how much you can borrow if you want to buy as many LVS shares as you possibly can? Also show me the initial balance sheet. (2) After your purchase, one year later, LVS falls to $40 per share. Do you subject to a market call when LVS falls to $40 per share one year later? Why? Show me how to get the new margin. (3) At what price are you subject to a margin call? (4) What is your annual return when LVS falls to $40 per share one year later? Suppose the call money rate is 4.5% and spread is 0.5% and NO dividend. (5) If you do not borrow any money, you just invest your own $9600 to buy LVS at $60 per share, and one year later, what is your annual return when LVS falls to 40 per share but still pay $3 dividend each share Step by Step Solution
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