Question

You have just bought (on 50% margin) 100 shares of IBM Corp. common stock for $108 per share. One year from now you expect to sell the stock for $140. The interest charge will be 9%. What return do you expect to earn on your investment? (Show all work. Ignore commissions.)

Answer #1

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*Please show work and explain*
An investor bought 100 shares of Copier Corp. for $90 a share.
The firm paid an annual dividend of $4 a share; the margin
requirement was 60 percent with an interest rate of 8 percent on
borrowed funds, and commissions on the purchase were $15 and on the
sale were another $15. The price of the stock rose to $120 in one
year.
What is the percentage return earned on the investment if the
stock...

1) A year ago you bought 100 shares of Bradley Corp. common
stock for $32 per share. During the year, you received dividends of
$2.50 per share. The stock is currently selling for $33.50 per
share. What was your total dividend income during the year? How
much was your capital gain? Your total dollar return? 2) Suppose
you expect the Bradley Corporation common stock in Problem 1 to be
selling for $33 per share in one year, and during the...

Last month you bought 100 shares of BIG on the margin at the
price of $150/share (50% initial margin, 35% maintenance margin).
The Price of BIG is now $110/share. At the same time, you bought
100 shares of SML on the margin at $100/share (same margin
requirements) and its price is now $90/share. What will your
combined cash call be? Please show all work and do not use excel or
a finance calculator.

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...

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...

*Please show work and explain*
An investor bought 100 shares of Copier Corp. for $90 a share.
The firm paid an annual dividend of $4 a share and commissions on
the purchase were $15 and on the sale were another $15. The price
of the stock rose to $120 in one year.
What is the percentage return earned on the investment if the
stock is bought for cash (i.e., the investor did not use
margin)?
Show your answer in percentage...

An investor is considering buying XYZ
Corp. stock on margin. His stockbroker informed him that 100 shares
of XYZ Corp. cost $42 a share. The margin requirement was 60
percent with an interest rate of 4.5 percent on borrowed funds, and
commissions on the purchase and sale were 4%. One year after the
investor invested in stock XYZ corp. paid an annual dividend of
$1.55 a share. The price of the stock also rose to $70 in one
year.
...

You purchased 100 shares of common stock on margin at $40 per
share. Assume the initial margin is 50% and the stock pays no
dividend. What would the maintenance margin be of a margin call is
made at a stock price of $25? Ignore interest on margin. Make sure
that you interpret your numerical answer (i.e. explain why would
you get the call at this rate).

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...

Assume that you short 100 shares of a stock at $50/share, and
there is a 50% initial margin. Now the price is at $35. What is
your new margin percentage? What is your dollar return? Will there
be a margin call?

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