Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jun 08, 2023

You buy 100 shares of MSFT @ price of $200 in a US margin account depositing $10,000. If the pz of the stock moves to

You buy 100 shares of MSFT @ price of $200 in a US margin account depositing $10,000. If the pz of the stock moves to $120 and the maintenance margin is 25%.

What would you expect to be the margin call?

Step by Step Solution

★★★★★

3.31 Rating (163 Votes )

There are 3 Steps involved in it

Step: 1

To calculate the margin call we need to determine the equity in the margin account after t... 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

Step: 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

Principles of Finance

Authors: Scott Besley, Eugene F. Brigham

6th edition

9781305178045, 1285429648, 1305178041, 978-1285429649

More Books

Students also viewed these Finance questions

Question

★★★★★

You want to buy 100 shares of a stock currently trading at $50 per share. Your brokerage firm allows margin sales with a 50% opening margin and a maintenance margin of 25%. What does this mean? If...

Answered: 1 week ago

Question

★★★★★

A European call option is a contract with the following conditions: At a prescribed time in the future, known as the expiration date, the holder of the option has the right, but not the obligation to...

Answered: 1 week ago

Question

★★★★★

A six-month call is the right to buy stock at $20. Currently, the stock is selling for $22, and the call is selling for $5. You buy 100 shares ($2,200) and sell one call (in other words, you receive...

Answered: 1 week ago

Question

★★★★★

Nanette works for Piroz and is paid a basic wage of $1,000 a week. Piroz operates the following bonus scheme: (1) Each employee gets a bonus of $4 for every unit they produce in excess of 2,000 units...

Answered: 1 week ago

Question

★★★★★

What are the advantages and disadvantages to a firm of financial hedging of its operating exposure compared to operational hedges (such as relocating its manufacturing site)?

Answered: 1 week ago

Question

★★★★★

A company purchases a delivery truck for $$39,000$ on July 1, 2008. The truck is estimated to have a useful life of 6 years and zero salvage value. The company uses the straight-line method of...

Answered: 1 week ago

Question

★★★★★

5. Explain the three types of knowledge Mr. Beechs students probably had to use while taking the algebra test.

Answered: 1 week ago

Question

★★★★★

The following data were accumulated for use in reconciling the bank account of Spectrum Co. for July: a. Cash balance according to the company's records at July 31, $8,346.50. b. Cash balance...

Answered: 1 week ago

Question

★★★★★

Why Do World Central Banks Trust Gold?

Answered: 1 week ago

Question

★★★★★

Identifying financing, investing, and operating transactions Required For a company like Canadian Tire Corporation, provide two examples of transactions that you would classify as financing,...

Answered: 1 week ago

Question

★★★★★

On January 1, a company issued and sold a $400,000, 7%, 10-year bond payable, and received proceeds of $396,000. Interest is payable each June 30 and December 31. The company uses the straight-line...

Answered: 1 week ago

Question

★★★★★

We Like Sweaters, Arts, and Sweets," also known as "WLSAS," recently purchased many products. First, they purchased sweaters from a factory in China. The manufacturing processes were as follows: the...

Answered: 1 week ago

Question

★★★★★

Given x = [1,2,3,4] and y = [6,5,7,10], please find a line of best fit that satisfies y = B1 B2x. Your task is to solve the values of B1 and B2 using the least squares approach and applying the...

Answered: 1 week ago

Question

★★★★★

A stacked column chart was selected (Fig. 1) when visualizing customer characteristicsbecause allows for quick comparison across various categories. Stacked column charts are usefulwhen an...

Answered: 1 week ago

Question

★★★★★

Answered: 1 week ago

Question

★★★★★

Look at the test script test.py. You can see that there is space for an additional test case in the test procedure test_avg. We want you to test the function on range(10,20). To do this: Create a...

Answered: 1 week ago

Question

★★★★★

The controller of Carla Vista Production has collected the following monthly expense data for analyzing the cost behavior of electricity costs. Total Total Electricity Costs Machine Hours January...

Answered: 1 week ago

Question

★★★★★

In Problem use geometric formulas to find the unsigned area between the graph of y = f(x) and the x axis over the indicated interval. f(x) = x + 5; [0, 4]

Answered: 1 week ago

Question

★★★★★

The accounts payables of Mommas Baby, Inc. generally equal $1.6 million. If the turnover of accounts payables is 20, what is its (a) Payables deferral period (DPO) (b) Annual credit purchases?

Answered: 1 week ago

Question

★★★★★

Suppose Reading Engine Company, which has a high beta as well as a great deal of corporate risk, merged with Simplicity Patterns Inc. Simplicitys sales rise during recessions, when people are more...

Answered: 1 week ago

Question

★★★★★

Microtech Corporation is expanding rapidly. Because it needs to retain all of its earnings, it does not currently pay any dividends. Investors expect Microtech to begin paying dividends eventually,...

Answered: 1 week ago

Question

★★★★★

11.43. The Economist magazine5 developed a qualityof-lifc index for nations as the predicted value obtained by regressing an average of lifesatisfaction scores from several surveys on gross domestic...

Answered: 1 week ago

Question

★★★★★

11.41. A study3 of mortality rates found in the U.S. that states with higher income inequality tended to have higher mortality rates. The effect of income inequality disappeared after controlling for...

Answered: 1 week ago

Question

★★★★★

11.34. Refer to the "OECD data" file at the text Web site, shown in Table 3.11 on page 62 of Chapter 3. Pose a research question about how at least two of the variables shown in that table relate to...

Answered: 1 week ago

Previous Question Next Question