Question

3. Assume you acquired 300 shares of a $50 stock for each total. Also, a 50...

3. Assume you acquired 300 shares of a $50 stock for each total. Also, a 50 percent initial margin is required i. what is the total market value of your position? Ii. How much will the 50 percent initial margin requirement allowed you to borrow? Iii. The value of your equity? If the stock price increases by 20 percent, what will be the current the total market value of your position? How much will the 50 percent initial margin requirement allowed you to borrow? Iii. The value of your equity?

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
You are bearish on Telecom and decide to sell short 100 shares at the current market...
You are bearish on Telecom and decide to sell short 100 shares at the current market price of $50 per share. How much in cash or securities must you put into your brokerage account if the broker’s initial margin requirement is 50% of the value of the short position? If you earn no interest on the funds in your margin account, what will be the rate of return after 1 year if the stock is selling at (i) $60; (ii)...
You are bearish on Telecom stock and decide to sell short 400 shares at the current...
You are bearish on Telecom stock and decide to sell short 400 shares at the current market price of $30 per share. How much cash must you put into your brokerage account if the broker’s initial margin requirement is 30% of the value of the short position? How high can the price of the stock go before you get a margin call if the maintenance margin is 35% of the value of the short position?
Suppose that you just short sold 100 shares of Quiet Minds stock for $67.00 per share....
Suppose that you just short sold 100 shares of Quiet Minds stock for $67.00 per share. a. If the initial margin requirement is 50%, how much equity must you invest? (Round your answer to the nearest dollar) Equity            $ b. Construct the balance sheet that corresponds to the transaction. Assets Liabilities and Equity Stock $ Short position (100 shares) $ T-bills $ Equity $ Total assets $ Total liabilities and equity $ c. Now suppose the price of the stock...
You are bearish on Telecom and decide to sell short 100 shares at the current market...
You are bearish on Telecom and decide to sell short 100 shares at the current market price of $41 per share. a. How much in cash or securities must you put into your brokerage account if the broker’s initial margin requirement is 50% of the value of the short position? b. How high can the price of the stock go before you get a margin call if the maintenance margin is 30% of the value of the short position?
You purchase 100 shares of a stock at $120 per share, on a margin of 55...
You purchase 100 shares of a stock at $120 per share, on a margin of 55 percent. The stock declines to $90. a.What is your initial margin position (equity and loan)? b.When the price declines to $90 per share will you be called upon to put up more margin to meet the 35 percent minimum maintenance margin requirement? If yes, how much equity would you need to add to your account? If no, how much equity do you have over...
You sell 100 short shares of stock at $60 per share. Initial Margin Requirement (IMR%)= 50%....
You sell 100 short shares of stock at $60 per share. Initial Margin Requirement (IMR%)= 50%. Maintenance margin for short sale of stock with price > $16.75 is 30% of market (or position) value QUESTIONS: 1. What is the price for margin call?   2. What is the new market value of the position?(Note: we haven’t deposited any add’l cash yet)
16) You are bearish on Telecom and decide to sell short 100 shares at the current...
16) You are bearish on Telecom and decide to sell short 100 shares at the current market price of $45 per share. a. How much in cash or securities must you put into your brokerage account if the broker’s initial margin requirement is 50% of the value of the short position? b. How high can the price of the stock go before you get a margin call if the maintenance margin is 30% of the value of the short position?...
You are bearish on Telecom and decide to sell short 100 shares at the current market...
You are bearish on Telecom and decide to sell short 100 shares at the current market price of $45 per share. a. How much in cash or securities must you put into your brokerage account if the broker’s initial margin requirement is 50% of the value of the short position? b. How high can the price of the stock go before you get a margin call if the maintenance margin is 30% of the value of the short position? (Round...
Assume that you buy 2 shares of Facebook Inc. at $220 per share, putting up a...
Assume that you buy 2 shares of Facebook Inc. at $220 per share, putting up a 50% margin. i) How much equity funds do you need to provide to make this margin transaction? What is the borrowed amount in this transaction? ii) If the stock price falls to $200 per share, what is your new margin position? iii) What is your rate of return (return on equity) in (ii)? What would your rate of return in (ii) be if the...
You are bearish on IBM and decide to sell short 100 shares at the current market...
You are bearish on IBM and decide to sell short 100 shares at the current market price of $100 per share. The broker's initial margin requirement is 50% of the value of the short position. The maintenance margin is 20% of the value of the short position. How high can the price of the stock go before you get a margin call?