Question

In: Finance

You have opened a stock portfolio account with a brokerage firm. You have only purchased stocks...

  1. You have opened a stock portfolio account with a brokerage firm. You have only purchased stocks of Home Depot. You purchased 200 shares of HD at $178/share.

a. Suppose the initial margin requirement is 50%. What is the maximum amount that you can borrow?

Solutions

Expert Solution

Please upvote

Margin = Investment * Initial margin

= (200 * 178) * 0.50

= 17800

Max amount you can borrow = 17800

If there is any query, ask in the comment section.

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

You have opened a stock portfolio account with a brokerage firm. You have only purchased stocks...
You have opened a stock portfolio account with a brokerage firm. You have only purchased stocks of Home Depot. You purchased 200 shares of HD at $178/share a. Suppose you borrowed at the set initial margin of 50% (that is you borrowed the maximum amount possible and invested the rest from your own savings). How much did you invest?
You’ve just opened a margin account with $16,000 at your local brokerage firm. You instruct your...
You’ve just opened a margin account with $16,000 at your local brokerage firm. You instruct your broker to purchase 1,200 shares of Landon Golf stock, which currently sells for $28 per share. Suppose the call money rate is 7 percent and your broker charges you a spread of 1 percent over this rate. You hold the stock for 6 months and sell at a price of $35 per share. The company paid a dividend of $0.47 per share the day...
You opened a brokerage account a year ago. At that time, you bought $10,000 worth of...
You opened a brokerage account a year ago. At that time, you bought $10,000 worth of shares of XYZ stock on margin - you used $5,000 of your own cash and borrowed $5,000 from the brokerage Örm. (a) Right now, XYZ stock is up 6% from a year ago and you decide to get out of your XYZ holdings. Assume the brokerage Örm charges 4% interest on its margin loans, Compute your investmentís holding period return. (b) Would you have...
ou only have four stocks in your portfolio. What will happen to your portfolio if you...
ou only have four stocks in your portfolio. What will happen to your portfolio if you add some randomly selected stocks to it? Question 4 options: a) The diversifiable risk will remain the same but the market risk will rise. b) The diversifiable risk to your portfolio will probably decline while the expected market risk will not change. c) The total portfolio risk should decline along with the expected rate of return, but the market risk will remain unchanged. d)...
You have a portfolio of three stocks: Stock A, Stock B, and Stock C.  The expected return...
You have a portfolio of three stocks: Stock A, Stock B, and Stock C.  The expected return of Stock A is 8%, the expected return of Stock B is 10%, and the expected return of Stock C is 12%.  The expected return of the portfolios is 10.5%. If the weight of asset B is three times the weight of asset A, what are the weights for the three assets?
A small stock brokerage firm wants to determine the average daily sales (in dollars) of stocks...
A small stock brokerage firm wants to determine the average daily sales (in dollars) of stocks to their clients. A sample of the sales for 30 days revealed an average daily sales of $200,000. Assume that the standard deviation of the population is known to be $20,000. 8. Provide a 90% confidence interval estimate for the true average daily sales. 9. Provide a 97% confidence interval estimate for the true average daily sales.
A small stock brokerage firm wants to determine the average daily sales (in dollars) of stocks...
A small stock brokerage firm wants to determine the average daily sales (in dollars) of stocks to their clients. A sample of the sales for 30 days revealed an average daily sales of $200,000. Assume that the standard deviation of the population is known to be $20,000. a) Provide a 90% confidence interval estimate for the true average daily sales. b) Provide a 97% confidence interval estimate for the true average daily sales.
Suppose you have a portfolio consisting of two stocks, Stock S and Stock T. $4,000 is...
Suppose you have a portfolio consisting of two stocks, Stock S and Stock T. $4,000 is invested in Stock S and $6,000 is invested in Stock T: State               Probability                 Stock S            Stock T Boom              0.10                             21%                 35% Normal            ?                                  6%                   11% Recession        0.60                             -17%               -40% What is the standard deviation of Stock S? 0.195194 0.186379 0.168237 0.142076 0.137335 What is the portfolio variance? 0.117452 0.093821 0.051505 0.043497 0.038826
You deposit $300,000 cash in a brokerage account and short sell $500,000 of stocks on margin....
You deposit $300,000 cash in a brokerage account and short sell $500,000 of stocks on margin. Later the value of the stocks held short decreases to $469,000. What is your holding period return over this period? Round your answer to 4 decimal places. For example, if your answer is 3.205%, then please write down 0.0321.
You have a $100,000 portfolio consisting only of Facebook, Netflix, and Tesla stocks. You put $30,000...
You have a $100,000 portfolio consisting only of Facebook, Netflix, and Tesla stocks. You put $30,000 in Facebook, $20,000 in Netflix, and the rest in Tesla. Their respective betas are 1.2, 1.1, and 0.9. Your portfolio beta is . Please enter your answer with TWO decimal points.
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT