Answered step by step
Verified Expert Solution
Question
1 Approved Answer
You wish to buy 1,000 shares of a stock that is currently selling for $25/share. your broker offers you 50% margin on all transactions, with
You wish to buy 1,000 shares of a stock that is currently selling for $25/share. your broker offers you 50% margin on all transactions, with a maintenance margin of 35%. the interest charged on loans is 8% per year
A) at what price point will a margin call be triggered?
B) Two months later, the stock pays a dividend of 75 cents a share, and the stock is trading at 21.90. calculate your ROI at this point?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
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