assume you sell short 100 shares of common stock at 50 per share, with initial margin...

assume you sell short 100 shares of common stock at 50 per share, with initial margin at 50%, at what price you will receive a margin call from your broker ( assuming maintenance margin of 30%)

answers- 42.26, 57.69, 62.00, 24.44

What is your rate of return in previous problem if you purchase the stock at $40 per share?

answers- 40%, 60%, 25%, 18%

Expert Solution

jeff jeffy answered 6 months ago

Assume you sold short 100 shares of common stock at $70 per share. The initial margin...

Assume you sold short 100 shares of common stock at $70 per share. The initial margin is 30%. What would be the maintenance margin if a margin call is made at a stock price of $85? A) 40.5% B) 20.5% C) 35.5% D) 23.5% E) none of the above 53. You sold short 100 shares of common stock at $45 per share. The initial margin is 30%. At what stock price would you receive...

1. Assume you sold short 100 shares of common stock at $50 per share. The initial...

1. Assume you sold short 100 shares of common stock at $50 per share. The initial margin is 60%. What would be the maintenance margin if a margin call is made at a stock price of $60? 2. Assume you sell short 100 shares of common stock at $45 per share, with initial margin at 50%. What would be your rate of return if you repurchase the stock at $40/share? The stock paid no dividends during the period, and you...

Assume you sell short 100 shares of Shell Corp. at $100 per share, with initial margin...

Assume you sell short 100 shares of Shell Corp. at $100 per share, with initial margin at 45%. The minimum margin requirement is 30%. The stock will pay no dividends during the period, and you will not remove any money from the account before making the offsetting transaction. At what price would you face a margin call? If the price is $110 at the end of the period, what is your margin ratio at that point?

You purchased 100 shares of common stock on margin for $150 per share. The initial margin...

You purchased 100 shares of common stock on margin for $150 per share. The initial margin requirement is 65%, the maintenance margin requirement is 40%. Find your rate of return in % if you sell the stock at $180 per share exactly 1 year later if interest rate on margin loan is 10%

You decide to sell short 50 shares of Ford at $10 per share. The initial margin...

You decide to sell short 50 shares of Ford at $10 per share. The initial margin requirement is 50%. The maintenance margin is 40%. (Please show the work/equations!!! Thanks!) 1) How much cash (X) must we put into the brokerage account? 2) How high can the stock price be before a margin call? 3) Suppose stock price immediately declines to P = $9. What is the rate of return for this investor? 4) Suppose stock price immediately rises to P...

1) Assume you buy 100 shares of stock at $40 per share on margin. The initial...

1) Assume you buy 100 shares of stock at $40 per share on margin. The initial margin is 50%. If the price rises to $55 per share, what is your percentage gain on the initial equity?

You purchased 100 shares of IBM common stock on margin at $151 per share. Assume the...

You purchased 100 shares of IBM common stock on margin at $151 per share. Assume the initial margin is 50%, and the maintenance margin is 30%. Below what stock price level would you get a margin call? Assume the stock pays no dividend; ignore interest on margin. Round your answer to the nearest cent (2 decimal places).

You sell short 200 shares at $50 per share. You post the 50% margin required for...

You sell short 200 shares at $50 per share. You post the 50% margin required for the short sale. Assume you earn no interest on your margin funds, nor pay any interest on the loan of shares. The company stock pays dividends of $0.33 per share every quarter. What is your rate of return on this position, if you close it out at $42 per share after one year? Enter answer in percents, accurate to 2 decimal places.

You purchased 100 shares of Express Scripts common stock on margin at $70.38 per share. Assume...

You purchased 100 shares of Express Scripts common stock on margin at $70.38 per share. Assume the initial margin is 50% and the maintenance margin is 30%. One year later, the stock price closes at $71.75. If the broker’s call loan rate is 2.00%, what is your return on equity? Can I please get a step by step breakdown so that I can better understand the process involved? Thank you.

You purchased 250 shares of common stock on margin for $45 per share. The initial margin...

You purchased 250 shares of common stock on margin for $45 per share. The initial margin is 60%, and the stock pays no dividend. Your rate of return would be ________ if you sell the stock at $48 per share. Ignore interest on margin. 0.132 0.238 0.111 0.208

Question