Mr. Suphi buys 100 shares of ABC stock on margin. The share price is $50 and...

Mr. Suphi buys 100 shares of ABC stock on margin. The share price is $50 and the initial margin is 50%. What is the maintenance margin on the account if the margin call is triggered at a share price of $35? Ignore the interest on the loan.

b) Mr. Suphi buys 200 shares of EFG stock on margin. The share price is $60 and the initial margin is 50%. What is Mr. Suphi’s rate of return on equity if he sells the stock a year later for $55 per share? Ignore the interest on the loan.

c) Mr. Suphi shorts 100 shares of XYZ stock at $50 per share. The initial margin is 50%. What is the maintenance margin if Mr. Suphi will receive a margin call when the stock price is $60?

Expert Solution

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jeff jeffy answered 1 year ago

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