Question

As an investor in the financial market, you have two situations that you can make profit...

As an investor in the financial market, you have two situations that you can make profit out of. Currently, the stock price is $30 per share. Identify the best strategy to follow for each case. First:When you expect that the price of BETA will decrease in 30 days to $25. The broker’s initial margin requirement is 60% of the value of the position. - What will be your strategy and your position? - How much will you lose or gain if you closed your position after 30 days? - Do you receive a call if the price will be $25 per share? - What should be the price of the stock for you to receive a margin call? the maintenance margin is 25%.

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

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 $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 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...
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?
You sold short 400 shares of a stock for $60 per share. Your broker’s initial margin...
You sold short 400 shares of a stock for $60 per share. Your broker’s initial margin requirement is 60%. The broker’s maintenance margin requirement is 35%. You initially want to put up as little capital (money) as possible to support the short sale. A.) How much capital must you have in your account before you can make the short sale? B.) If the stock price goes to $70 per share, will you receive a margin call? Show your work to...
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’ve borrowed $15,000 on margin to buy shares in Ixnay, which is now selling at $40...
You’ve borrowed $15,000 on margin to buy shares in Ixnay, which is now selling at $40 per share. Your account starts at the initial margin requirement of 50%. The maintenance margin is 30%. Two days later, the stock price falls to $38 per share. a. Will you receive a margin call? Yes No b. How low can the price of Ixnay shares fall before you receive a margin call? (Round your answer to 2 decimal places.)    Margin call will...
12A) You short-sell 100 shares of Tuckerton Trading Co., now selling for $44 per share. What...
12A) You short-sell 100 shares of Tuckerton Trading Co., now selling for $44 per share. What is your maximum possible gain, ignoring transactions cost? Multiple Choice $44 $56 unlimited $4,400 12B)You’ve borrowed $30,222 on margin to buy shares in Ixnay, which is now selling at $43.8 per share. You invest 1,380 shares. Your account starts at the initial margin requirement of 50%. The maintenance margin is 35%. Two days later, the stock price changes to $54 per share. a. Will...
You’ve borrowed $29,648 on margin to buy shares in Ixnay, which is now selling at $43.6...
You’ve borrowed $29,648 on margin to buy shares in Ixnay, which is now selling at $43.6 per share. You invest 1,360 shares. Your account starts at the initial margin requirement of 50%. The maintenance margin is 35%. Two days later, the stock price changes to $53 per share. a. Will you receive a margin call? (Yes or No) b. At what price will you receive a margin call?
2. An investor purchases 500 shares of ABC stock on margin. The current price of ABC...
2. An investor purchases 500 shares of ABC stock on margin. The current price of ABC stock is $75 per share, the initial margin requirement is 60% and the maintenance margin requirement is 35%. A)   What is the dollar amount of the loan the investor receives from her broker for this margin purchase? B)    How far can the stock price fall before the investor gets a margin call?
You are bearish on Telecom and decide to sell short 240 shares at the current market...
You are bearish on Telecom and decide to sell short 240 shares at the current market price of $85 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? (Round your answer to the nearest whole dollar.) Cash or securities to be put into brokerage account : ______________ b. How high can the price of the stock go before...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT