What is the percentage margin of a margin call if an investor has purchased $10,000 worth of securities and the broker requires a margin of $5,000?
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1. What is the percentage margin of a margin call if an investor has purchased $10,000 worth of securities and the broker requires a margin of $5,000?
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- Jason Momoa put up $18,000 to take a long position in XYZ stock with a price of $30. a) If the initial margin rate on the position is 60%, how many shares can you purchase? b) What dollar amount are you borrowing from the brokerage firm? Include workingAn investor who bought money-market securities at a yield of 5.50% p.a. and sold the parcel for a few weeks later at a yield of 5.85% p.a. would earn: a interest b a capital loss c a capital gain d. interest and a capital loss e. interest and capital gain.Identify and explain the markets in which the following in which the following trade in: used cars, paintings and rare coins. If, An investor initially pays K6 000 towards the purchase of K10 000 worth of shares at K100 each borrowing the rest from a broker, draw up the investor’s simple balance sheet to reflect this transaction and Calculate the initial margin and the margin if the share price falls to K70. Suppose the maintenance margin is 30 %. How far could the stock price fall before the investor would get a margin call? Suppose the margin is 40 %. How far can the stock price fall before the investor gets a margin call? An investor is bullish on a stock selling for K100. He instructs his broker to sell short 1000 borrowed shares. If the broker has a 50 % requirement on short sales, draw up the investor’s simple balance sheet to reflect this transaction. What will happen if the share price falls to K70? If the broker has a maintenance margin of 30 % on short sales,…
- If you have a margin account and your broker requires 40% initial margin, this means: a. borrow no more than 40% of the purchase price of the stock from your broker b. borrow no more than 60% of the purchase price of the stock from your brokerYou just bought $8,000 worth of a stock priced at $40 per share using 50% initial margin. The broker charges 6% on the margin loan and requires a 30% maintenance margin. At what price would you expect to get a margin call? To restore your margin to the initial margin level, how much would you need to deposit?Suppose an investor sells 100 stocks by short selling for 6 months, the stock price is 30 yuan, and the annual interest rate of 6 months is fixed at 3%. How can I use forward contracts to avoid risks? What is the execution price? Please analyze if the stock price rises to 35 yuan or falls to 25 yuan after 6 months of hedging, what are the losses of this investor?
- Suppose that Xtel currently is selling at $52 per share. You buy 500 shares using $20,000 of your own money, borrowing the remainder of the purchase price from your broker. The rate on the margin loan is 9%. a. What is the percentage increase in the net worth of your brokerage account if the price of Xtel immediately changes to: (i) $56.68; (ii) $52; (iii) $47.32? What is the relationship between your percentage return and the percentage change in the price of Xtel? (Leave no cells blank - be certain to enter "0" wherever required. Negative values should be indicated by a minus sign. Round your answers to 2 decimal places.) b. If the maintenance margin is 25%, how low can Xtel’s price fall before you get a margin call? (Round your answer to 2 decimal places.) c. How would your answer to (b) change if you had financed the initial purchase with only $13,000 of your own money? (Round your answer to 2 decimal places.) d. What is the rate of return on your…Suppose that Xtel currently is selling at $52 per share. You buy 500 shares using $20,000 of your own money, borrowing the remainder of the purchase price from your broker. The rate on the margin loan is 9%. a. What is the percentage increase in the net worth of your brokerage account if the price of Xtel immediately changes to: (i) $56.68; (ii) $52; (iii) $47.32? What is the relationship between your percentage return and the percentage change in the price of Xtel? (Leave no cells blank - be certain to enter "0" wherever required. Negative values should be indicated by a minus sign. Round your answers to 2 decimal places.) b. If the maintenance margin is 25%, how low can Xtel’s price fall before you get a margin call? (Round your answer to 2 decimal places.) c. How would your answer to (b) change if you had financed the initial purchase with only $13,000 of your own money? (Round your answer to 2 decimal places.) d. What is the rate of return on your margined position…In many markets, all the proceeds from a short sale are deposited as collateral with the lender (i.e., the initial margin is essentially 100%). If the collateral value is then reduced to 50% of the value of the stocks that the short seller owes to the lender, the lender would require the short seller to restore the collateral value to 100%. You are a short seller in such a market. Initially, you shorted 2,000 shares of the stock at $5.55 per share. At what stock price will the lender ask you to restore the collateral value to 100%? $8.33 b. $11.10 c. $7.40 d. Not enough information to answer that question
- You decided to invest $10,000 of your savings in a stock whose current price is $25 per share. To utilize the benefit of margin investing, you borrowed an additional $10,000 from your broker and invested $20,000 in the stock, If the maintenance margin is 30 pereent, at what price will you receive your first margin call?Long the asset in spot trade A trader has a margin account with total cash deposit of $20, 000. He bought 400 sharesof a stock at the price of $100. If the minimum margin maintanance is 25%, what priceof the stock today would lead to a margin call on his account? If withdraw is allowed atthe margin ratio is above 50% after the withdraw, What price of the stock today wouldallow him to withdraw $2, 000 cash from the margin account?An investor has $633,000 to invest in bonds. Bond A yields an average of 8% and the bond B yields 5%. The investor requires that at least 3 times as much money be invested in bond A as in bond B. You must invest in these bonds to maximize his return. This can be set up as a linear programming problem. Introduce the decision variables: ?=dollars invested in bond A ?=dollars invested in bond B Compute ?+? $ ________. Round to the nearest cent.
