Question

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 decimal places.)

c. If the maintenance margin requirement is 30%, will she receive a margin call? Yes No

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

Answer 1

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