1.) Assume you purchased 100 shares of Zoomer Corp's stock on margin at the beginning of...

1.) Assume you purchased 100 shares of Zoomer Corp's stock on margin at the beginning of the year for $40 per share. You use $2500 of your own funds and borrow $1500 from the broker. Maintenance Margin requirement is 25%.

a) At what price would you receive a margin call (ignore interest)?

b) Annual interest cost is 4% on the margin account loan. What is your rate of return on your investment if Zoomer's stock is $44.50 per share after one year?

c) What is the margin perfect (equity/assets) in your account at the end of the year?

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SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

jeff jeffy answered 1 year ago

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