Question

Use the following to answer the next three questions. Three months ago, you purchased 1000 shares of ABC stock on margin at $15/share. The initial and maintenance margins are 60% and 40%, respectively. Your broker charges you a 6% annual interest rate on borrowed funds. You've received a $1 dividend per share over the course of your investment. ABC trades for $12/share today. Find your current margin. Round intermediate steps and your final answer to four decimals and enter your answer in decimal format (EX: .XXXX).

Find the lowest price that ABC can trade for before you receive a margin call. Round your final answer to two decimals.

4.29 |
||

6.43 |
||

15 |
||

10 |

Find your ROIC if you choose to close your margin position today. Round intermediate steps and your final answer to four decimals and enter your answer in decimal format (ex: .XXXX).

Answer #1

Initial margin ==> 100*15*60% ==> 9000

Interest ==> 1000*15*40%*6%

Decrease in value of stocks ==> 1000*(15-12) ==> 3000

Dividends ==> 1000*1 ==>1000

Current Margin ==>(9000-36-3000+1000)==>6640

value of stocks ==> 1000*12 ==> 12000

Therefore the current margin ==> 6640/12000 ==>0.5533

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Question 1. Part A. Use the following information to answer the
next four questions.
Suppose that the current one-year treasury rate is 3%. The rates
for treasury securities that mature in years two through six are
3.25%, 2.80%, 2.95%, 3.30%, and 3.40%, respectively.
Based on the pure expectations hypothesis, what is the expected
two year rate, three years from now? Round intermediate steps and
your final answer to four decimals. Provide your answer in decimal
format ( EX: .XXXX)
Part...

Use the following table to answer the next two questions.
Stock
1/2/19 Price
1/2/20 Price
X
50
48
Y*
70
55
Z**
114
69
*4:3 Split after close of 1/2/19
**8:5 Split after close of 1/2/19
Find the percentage change in a price weighted index consisting
of these three stocks from 2019-2020. Round intermediate steps and
your final answer to four decimals.
Find the percentage change of an equally weighted index
consisting of these stocks. Round intermediate steps and your...

QUESTION 5
Use the following chart to answer the next two questions.
Currency
2017
2018
2019
Pounds
£.8/$
$1.35/£
£.9/$
Yen
¥125/$
¥122/$
$.007/¥
Euros
€1.1/$
€/$.85
$.95/€
1. What is the percentage appreciation/depreciation of the
dollar from the British point of view from 2017 to 2018? Round
intermediate steps and your final answer to four decimals. Express
your answer in decimal format (ex. .XXXX)
2.
What is the percentage appreciation/depreciation of the euro
from the US point of view...

Theta's 7% bonds were issued 10 years ago and currently trade
for $985. These bonds mature in 8 years, but can be called away in
2 years at a 4% premium. Find the yield to maturity. Round
intermediate steps and your final answer to four decimals and enter
your final answer in decimal format (.XXXX).

Use the following information to answer the next two
questions.
Suppose the spot quote for pesos in terms of Canadian dollars is
C$.1215‑25 and the spot quote for US dollars in terms of Canadian
dollars is C$.9855-64. What is the bid quote for pesos in terms of
US dollars? Round intermediate calculations to four decimal
places.
$.1243
$.1232
$.1242
$.1233
None of the above
6.25 points
QUESTION 3
Find the ask quote for pesos in terms of US dollars....

Use the following chart to answer the next two questions.
6/1
6/2
6/3
£.625/$
$1.50/£
£.72/$
¥150/$
¥150/$
¥125/$
€1.25/$
€/$.80
$.90/€
How many euros would you receive for 100,000 pounds on 6/2?
Round intermediate steps to four decimals and your final answer to
two decimals.

Number of shares
Closing Prices
Company
outstanding
Year T
Year T + 1
W
1,500
$22.00
$18.00
X
2,500
35.00
25.00
Y
2,000
10.00
15.00
Z
3,000
50.00
48.00
Find the percentage change of a value-weighted index consisting
of these four stocks from years T to T+1. Round your final answer
to four decimals and enter your answer in decimal format (EX:
.XXXX)
Which of the following is a flaw of price-weighted indices?
They cannot be adjusted for stock splits...

Two months ago, you decided to purchase 500,000 pounds at a spot
rate of £=$1.045-60. You sold all of your pounds today at the going
spot rate of $= £.965-74. Find your profit/loss in terms of
dollars. Round intermediate steps to four decimals.
4031.10
-16,652.98
15,301.89
-11865.29

1. You bought a stock ten years ago for $90. The stock paid $8
in dividends each year you held it. What is your realized rate of
return if you sold it today for $75? Round your final
answer to 4 decimals.
2. Michaels Inc. preferred stock sells for $22 and has a 16%
required rate of return. Find the dividend Michaels pays to its
preferred shareholders. Round intermediate steps to four decimals
and your final answer to two decimals....

Youngblood Inc. issued 12% bonds 10 years ago to finance a plant
expansion. These bonds mature 4 years from today and are priced to
yield 8%. Find the intrinsic value of these bonds. Round
intermediate steps to four decimals and your final answer to two
decimals. Do not use the dollar sign when entering your
response.

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