Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Show calculation as well You have been watching Anglo Platinum (JSE: AMS) and believe that the share price should increase over the next two months.

image text in transcribed

Show calculation as well

You have been watching Anglo Platinum (JSE: AMS) and believe that the share price should increase over the next two months. Assuming that your broker charges a borrowing rate of 7% a year, requires an initial margin of 60%, maintenance margin of 30% and an initial assumed exposure of 1000 shares, calculate: Bid Time Ask Today 28.25 29.38 Two months time 31.30 | 32.55 Question 1 The return on then margin strategy is closest to: A) 13.08% B) 11.71% C) 6.69% D) 8.06% E) 10.14% Question 2 The price equal to or below which you will get a margin call is closest to: A) R21.66 B) R19.39 C) R16.79 D) R13.35 E) R22.41

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

Recommended Textbook for

Foundations Of Financial Markets And Institutions

Authors: Frank J Fabozzi, Franco G Modigliani, Frank J Jones

4th Edition

0136135315, 978-0136135319

More Books

Students also viewed these Finance questions