Question

Dée Trader opens a brokerage account and purchases 300 shares of Internet Dreams at $40 per share. She borrows $4,000 from her broker to help pay for the purchase. The interest rate on the loan is 8%. (LO 3-4)

a. What is the margin in Dée’s account when she first purchases the stock?

b. If the share price falls to $30 per share by the end of the year, what is the remaining margin in her account?

c. If the maintenance margin requirement is 30%, will she receive a margin call?

d. What is the rate of return on her investment?

Answer #1

Dée Trader opens a brokerage account and purchases 300 shares of
Internet Dreams at $38 per share. She borrows $4,300 from her
broker to help pay for the purchase. The interest rate on the loan
is 9%.
a. What is the margin in Dée’s account when she first purchases
the stock?
b. If the share price falls to $30 per share by the end of the
year, what is the remaining margin in her account? (Round your
answer to 2...

Dée Trader opens a brokerage account and purchases 100 shares of
Internet Dreams at $60 per share. She borrows $2,000 from her
broker to help pay for the purchase. The interest rate on the loan
is 10%.
a. What is the margin in Dée’s account when she
first purchases the stock?
b. If the share price falls to $50 per share by
the end of the year, what is the remaining margin in her account?
(Round your answer to 2...

Dée Trader opens a brokerage account and purchases 300 shares of
Internet Dreams at $32 per share. She borrows $4,600 from her
broker to help pay for the purchase. The interest rate on the loan
is 6%.
a. What is the margin in Dée’s account when she first purchases
the stock?
b-1. If the share price falls to $21 per share by the end of the
year, what is the remaining margin in her account? (Round your
answer to 2...

Dée Trader opens a brokerage account and purchases 300 shares of
Internet Dreams at $32 per share. She borrows $4,600 from her
broker to help pay for the purchase. The interest rate on the loan
is 6%.
a. What is the margin in Dée’s account when she
first purchases the stock?
Margin
$
b-1. If the share price falls to $21 per share
by the end of the year, what is the remaining margin in her
account? (Round your answer...

Dée Trader opens a brokerage account and purchases 100 shares of
Internet Dreams at $52 per share. She borrows $2,800 from her
broker to help pay for the purchase. The interest rate on the loan
is 7%.
a. What is the margin in Dée’s account when she
first purchases the stock?
b. If the share price falls to $30 per share by
the end of the year, what is the remaining margin in her account?
(Round your answer to 2...

Dée Trader opens a brokerage account and purchases 200 shares of
Internet Dreams at $46 per share. She borrows $2,400 from her
broker to help pay for the purchase. The interest rate on the loan
is 8%.
a. What is the margin in Dée’s account when she
first purchases the stock?
b. If the share price falls to $36 per share by
the end of the year, what is the remaining margin in her account?
(Round your answer to 2...

Dée Trader opens a brokerage account and purchases 100 shares of
Internet Dreams at $60 per share. She borrows $2,000 from her
broker to help pay for the purchase. The interest rate on the loan
is 10%.
a. What is the margin in Dée’s account when she
first purchases the stock?
b. If the share price falls to $50 per share by
the end of the year, what is the remaining margin in her account?
(Round your answer to 2...

Dée Trader opens a brokerage account and purchases 200 shares of
Internet Dreams at $44 per share. She borrows $4,150 from her
broker to help pay for the purchase. The interest rate on the loan
is 10%.
a. What is the margin in Dée’s account when she
first purchases the stock?
b. If the share price falls to $34 per share by
the end of the year, what is the remaining margin in her account?
(Round your answer to 2...

Dée Trader opens a brokerage account, and purchases 390 shares
of Internet Dreams at $56 per share. She borrows $4,050 from her
broker to help pay for the purchase. The interest rate on the loan
is 5%. If the share price falls to $46 per share by the end of the
year, what is the margin% in her account at that time? If the
maintenance margin requirement is 34%, will she receive a margin
call?
A.
76.30%; Yes
B.
58.81%;...

Dée Trader opens a brokerage account and purchases 200 shares of
Internet Dreams at $50 per share. She borrows $3,300 from her
broker to help pay for the purchase. The interest rate on the loan
is 6%.
a. What is the margin in Dée’s account when she first purchases
the stock?
Margin=
b-1. If the share price falls to $40 per share by the end of the
year, what is the remaining margin in her account? (Round your
answer to...

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