Question
Suppose an investor initially pays K6000 toward the purchase of K10000 worth of stock at K100 per share, borrowing the balance from a broker. What
- Suppose an investor initially pays K6000 toward the purchase of K10000 worth of stock at K100 per share, borrowing the balance from a broker. What would be the investors initial balance sheet? What if the price declines to K70, what would be the new balance sheet? And in both cases what is the investors equity?
Suppose the maintenance margin is 30%. How far could the stock price fall before the investor would get a margin call? Suppose the maintenance margin is 40%?
- Suppose an investor initially pays K6000 toward the purchase of K10000 worth of stock at K100 per share, borrowing the balance from a broker. What would be the investors initial balance sheet? What if the price declines to K70, what would be the new balance sheet? And in both cases what is the investors equity?
Suppose the maintenance margin is 30%. How far could the stock price fall before the investor would get a margin call? Suppose the maintenance margin is 40%?
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Introductory Course On Financial Mathematics
Authors: M V Tretyakov
1st Edition
1908977388, 978-1908977380
