Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Rodomir bought 5751 shares at $86.22 and has an initial and maintenance margin of 30% on his account. When he opened the account, 11 months

Rodomir bought 5751 shares at $86.22 and has an initial and maintenance margin of 30% on his account.

When he opened the account, 11 months ago, he just met the minimal margin requirements.

The cost of the loan for the margin trade was 6.5% EAR. If any margin calls happen, he must respect the new loan balance.

Given that the stock has just attained the price of $11.55, how much of a margin call (in dollars/$) must Rodomir meet?

If there is no margin call, simply put the value zero.

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

Students also viewed these Finance questions