Question
In: Finance
The initial margin requirement on a stock purchase is 45.7%. If you fully use your initial...
The initial margin requirement on a stock purchase is 45.7%. If you fully use your initial margin to purchase 348 shares of Facebook at $266, What is the minimum dollar amount you will need to initiate this transaction (your equity in the investment)? Enter your answer in the box below and round to two decimals.
Solutions
Expert Solution
What is the minimum dollar amount you will need to initiate this transaction
=(348*266)*45.7%
=42303.58
the above is answer
jeff jeffy answered 2 years agoRelated Solutions
You purchased 800 shares of stock for $49.20 a share. The initial margin requirement is 65...
You purchased 800 shares of stock for $49.20 a share. The
initial margin requirement is 65 percent and the maintenance margin
is 35 percent. What is the lowest the stock price can go before you
receive a margin call?
What is the lowest the stock price can go before you receive a
margin call if both the initial and maintenance margins are
100%?
What is the lowest the stock price can go before you receive a
margin call if both...
1. You purchase an interest rate futures contract that has an initial margin requirement of 9%...
1. You purchase an interest rate futures contract that has an
initial margin requirement of 9% and a futures price of $130,538.
The contract has a $100,000 underlying par value bond. If the
futures price falls to $126,500, you will experience a ______ loss
on your money invested.
Multiple Choice
A 24.00%
B 57.37%
C 45.37%
D 34.37%
2. Malmentier SA stock is currently priced at $120, and it does
not pay dividends. The instantaneous risk-free rate of return is...
Suppose a margin account has an initial margin requirement of 50% and a maintenance margin requirement...
Suppose a margin account has an initial margin requirement of
50% and a maintenance margin requirement of 25%.
The account currently has a balance of $10000, so the initial
buying power is $ ___
Suppose the total leverage is used to buy a stock at the price
of $5.00/share. When the stock price falls below the critical price
of $ ___ /share, a margin call will be sent to the account
holder
Your client wants to purchase stock on margin. You assess the client and the stock and...
Your client wants to purchase stock on margin. You assess the
client and the stock and decide that a 40% margin is appropriate.
Commissions are 1% and the rate of interest on margin loans is 8%.
The current price of the stock is $100/share and your client wants
to purchase 1,000 shares.
a. How much cash must your client put into the acc ount to
support the initial purchase?
b. Below what price would the price of the stock have...
An investor opens a margin account with a discount broker. The initial margin requirement is 50%....
An investor opens a margin account with a discount broker. The
initial margin requirement is 50%. The maintenance margin is 30%.
The investor intends to buy 1000 shares of XYZ at $40. An interest
rate on the margin loan is 4% per year. The stock does not pay any
dividends.
How much money must the investor deposit?
Assuming the investor deposits $30,000 (NOT the amount you
calculated in part (a) and buys the shares. How far could the stock
price...
An investor opens a margin account with a discount broker. The initial margin requirement is 50%....
An investor opens a margin account with a discount broker. The
initial margin requirement is 50%. The maintenance margin is 30%.
The investor intends to buy 1000 shares of XYZ at $40. An interest
rate on the margin loan is 4% per year. The stock does not pay any
dividends.
How much money must the investor deposit?
Assuming the investor deposits $30,000 (NOT the amount you
calculated in part (a) and buys the shares. How far could the stock
price...
An investor opens a margin account with a discount broker. The initial margin requirement is 50%....
An investor opens a margin account with a discount broker. The
initial margin requirement is 50%. The maintenance margin is 30%.
The investor intends to buy 1000 shares of XYZ at $40. An interest
rate on the margin loan is 4% per year. The stock does not pay any
dividends.
Assume the investor has a cash account (not margin account) and
he or she sells the shares at the price you calculated in part (b).
Recalculate the investor’s rate of...
Use the following data for questions 8-11. Assume an initial margin requirement of 55% and maintenance...
Use the following data for questions 8-11. Assume an initial
margin requirement of 55% and maintenance margin of 40%. An
investor has $5,500 in cash and wishes to purchase ABC stock. ABC
is currently trading at $100 per share and your broker charges 7.5%
interest on margin loans for the period.
1- What is the return on equity of the margin position after one
year when price rises to $120?
2-What is the return on equity of the margin position...
Use the following data for questions 8-10. Assume an initial margin requirement of 55% and maintenance...
Use the following data for questions 8-10. Assume an initial
margin requirement of 55% and maintenance margin of 40%. An
investor has $5,500 in cash and wishes to purchase ABC stock. ABC
is currently trading at $100 per share and your broker charges 7.5%
interest on margin loans for the period.
8. What is the return on equity of the margin position after one
year when price rises to $120? (a) 20.23% (b) 30.23% (c) 40.23% (d)
None of the...
Suppose you purchase 500 shares of AAPL at $318. Initial margin is 60%. Maintenance margin is...
Suppose you purchase 500 shares of
AAPL at $318. Initial margin is 60%. Maintenance margin is 35%.
Answer the following questions:
How much money do you borrow with the initial transaction?
If AAPL stock rises to $347, calculate YOUR holding period
return.
How far would AAPL stock have to fall for you to receive a
margin call?
If your broker charges a call loan rate of 8%, how does that
change your answer for c? (assume the price drop occurs...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- A researcher wishes to estimate the proportion of adults who have high-speed Internet access. What size...
- (1) What are some pitfalls in writing an RFP? What information should be provided as part...
- You are creating an enhanced entity relationship model for a campus information system. A junior team...
- 1.-Evolving into Multinationalism. As a firm evolves from purely domestic into a true multinational enterprise, it...
- A guidance counselor claims that high school students in a college preparation program have higher ACT...
- As a supervisor of a production department, you must decide the daily production totals of a...
- how can a virus encode a protein larger than the size of its genome?
ADVERTISEMENT