Question

Suppose you buy 100 shares of stock XYZ at $10 a share with a
margin of 50%. You also buy 200 shares of stock ABC at $50 a share
with an 60% margin. You are very sure that,
* in six month*, the price
of the first stock would be $15 because you got insider
information, but you are not so sure about the price of the second
stock. Suppose you want to achieve a 20% return from your
portfolio, then the price of the second stock needs to be at least
how much to achieve that goal. (Assuming the broker charges you an
6% margin loan interest and the stocks pay no dividend)

$51.68 |
||

$52.68 |
||

$53.68 |
||

$54.68 |

Answer #1

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FEEL FREE TO ASK. THUMBS UP PLEASE**

Suppose you buy 100 shares of stock XYZ at $10 a share with a
margin of 50%. You also buy 200 shares of stock ABC at $50 a share
with an 60% margin. You are very sure that,
in six month, the price
of the first stock would be $15 because you got insider
information, but you are not so sure about the price of the second
stock. Suppose you want to achieve a 20% return from your
portfolio, then...

Suppose you buy 100 shares of stock XYZ at $10 a share with a
margin of 50%. You also buy 200 shares of stock ABC at $50 a share
with an 60% margin. You are very sure that, in six month, the price
of the first stock would be $15 because you got insider
information, but you are not so sure about the price of the second
stock. Suppose you want to achieve a 20% return from your
portfolio, then...

You short-sell 50 shares of XYZ stock at $100 per share. Your
broker's initial margin requirement is 50% of the value of your
short position. You put up cash to satisfy the initial margin
requirement.
a) What will be your rate of return (after 1 year) if XYZ stock
sells at $110 a share? Assume that you do not earn any interest on
your funds in the margin account and that the stock pays a dividend
of $1.50 a share...

Suppose you buy a round lot of Francesca Industries stock (100
shares) on 55 percent margin when the stock is selling at $30 a
share. The broker charges a 12 percent annual interest rate, and
commissions are 2 percent of the stock value on the purchase and
sale. A year later you receive a $0.65 per share dividend and sell
the stock for $41 a share. What is your rate of return on Francesca
Industries? Do not round intermediate calculations....

Assume you want to buy 100 shares of stock at $50 per share
because you feel it will rise to $60 within 3 months. The stock
pays $4 per share in annual dividends. You are going to buy the
stock with 70% margin and will pay 8.0% interest on the margin
loan.
Calculate the return if the price go up to $55 in 3 months.

You have just borrowed $67,500 on margin to buy shares in ABC,
which is currently quoting as the bid price of $29.99 bid and the
ask price of $30.00 ask per share. The minimum margin is 35%, and
your initial margin requirement is 55%. Assume that ABC will pay no
dividends before you return the loan and that that you pay no
interest on your loan.
If you buy ABC in margin, what is the maximum number of shares
you...

You purchased 500 shares of stock XYZ for $80 per share. You
borrowed $15,000 from your broker to help pay for the purchase. A.)
How much initial percent margin do you have in your account? B.) If
your broker does not charge any interest payments on margin loans,
how low can the price of the stock XYZ fall before you receive a
margin call? Your broker has a maintenance margin requirement of
40% for stock XYZ.
Please show your work!...

2. Suppose you short sell 100 shares of stock X, which now sells
for $200/share. What is your maximum possible loss? What happens to
the maximum loss if you simultaneously place a "stop-buy" order at
$210?
3. Suppose that you open a brokerage account and purchase 300
shares of stock Y at $40/share. You borrow $4,000 from your broker
to help you pay for the purchase. The interest rate on your loan is
8%. What is the margin in your...

You purchased 100 shares of common stock on margin at $45 per
share. Assume the initial margin is 50% and the stock pays no
dividend. What would the maintenance margin be if a margin call is
made at a stock price of $30? Ignore interest on margin. A.0.33
B.0.55 C.0.43 D.0.23 E.0.253. Assume you purchased 200 shares of GE
common stock on margin at $70 per share from your broker. If the
initial margin is 55%, how much did you...

You just bought 200 shares of a stock priced at $48 per share
using 50% initial margin. The broker charges 4% annual interest
rate on the margin loan and requires a 30% maintenance
margin. One year later stock price dropped to 31 and you
recieved margin call, to restore your margin to the initial margin
level, how much would you need to deposit?
Answer ___+/- ____
You sell short 100 shares of company A which are currently
selling at $32 per...

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