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Dée Trader opens a brokerage account and purchases 300 shares of Internet Dreams at $40 per...

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%.

a. If the share price falls to $30 per share by the end of the year, what is the remaining margin in her account? (Keep no decimal place.)

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

yes

no

c. What is the rate of return on her investment? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)

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jeff jeffy answered 2 years ago
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