Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Security 1 is presently trading for 91.56. You decide to purchase 1,500 shares. Security 2 is presently trading for 81.77, and you decide to purchase

Security 1 is presently trading for 91.56. You decide to purchase 1,500 shares. Security 2 is presently trading for 81.77, and you decide to purchase 1,250 shares. Suppose you have an IMR of 50% and an MM of 25%. Interest on any borrowed funds will be chargedO6.5% APR, monthly compounding, and you intend to utilize your margin to capacity. There is no brokerage fee to short, and you do not earn any interest on cash deposited. All your accounts are aggregated. Exactly 3 months from now, you notice that Security 1 is trading for 89.56 and Security 2 is trading for 75.30. What will the equity in your account be at this time? Round to 4 decimal places, as 110,545.6322 for example.

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_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Foreign Investment And Spillovers

Authors: Magnus Blomstrom

1st Edition

1138025976,1317685121

More Books

Students also viewed these Finance questions