Question

In: Finance

IMR   0.50                   MMR   0.30               &

IMR   0.50                   MMR   0.30                 Call rate   0.0375                     Shares   1,000

Verizon

Purchase price

$54.35

Expected sales price

$57.97

Months held

11

What is your initial margin requirement?

What is your return?

Suppose you don’t sell the stock.  What is the lowest it can go before you receive a margin call?

The price of the stock drops to $35.00.  What is the amount of your margin call?

What is the maximum market value you can have if you can’t meet the margin call?

What is the reduction needed?

How many shares is your broker going to sell?

What is your new market value?

What is your new loan?

Solutions

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