You deposited P100,000 cash in brokerage account and short sell P200,000 of stocks on margin. Later the value of the stocks held short rises to P250,000. What is your account margin in percent?
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You deposited P100,000 cash in brokerage account and short sell P200,000 of stocks on margin. Later the value of the stocks held short rises to P250,000. What is your account margin in percent?
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- You are interested in buying the preferred stock of a bank that pays a dividend of RM1.80 every quarter. If you discount such cash flows at 8 percent, what is the price of this stock?You are interested in buying the preferred stock of a bank that pays a dividend of $1.55 every quarter. If you discount such cash flows at 8 percent, what is the value of this stock? Value of the stock $enter the value of the stockIn you cash account, you buy 100 shares of XYZ Corporation at a price of $10 per share. Two months later, XYZ pays a dividend $0.21 per share. You sell all 100 shares of XYZ three months later at a price of $12 per share. If you wanted to lever up the returns of this trade, you could have executed it in your _____ account. A) cash B) margin C) brokerage D) bank If you borrowed 50% of the upfront investment amount, your return (in percent terms) would have been _____. A) 11.10 B) 22.10 C) 44.20
- Your broker mailed you your year-end statement. You have P250,000 invested in Happy Chemical, P180,000 tied up in Honey Pie Co., P360,000 in Sweet Candy and P110,000 in MyBabeCorp. The annualized returns for thee stock is 16.5% for Happy; 12% for Honey; 18.5% for Sweet and 15.3% for MyBabe. What is the return of your entire portfolio?A stock sells for GH₵ 40. The next dividend will be GH₵ 4 per share. If the rate of return on reinvested funds is 15% and the company reinvests 40% of earnings in the firm, what must the discount rate be?The preferred stock of KICO store, is selling currently at RM47.13. If the required rate of return is 12.2 percent, what is the dividend paid by this stock?
- In you cash account, you buy 100 shares of XYZ Corporation at a price of $10 per share. Two months later, XYZ pays a dividend $0.21 per share. You sell all 100 shares of XYZ three months later at a price of $12 per share. If you wanted to lever up the returns of this trade, you could have executed it in your _____ account. A) cash B) margin C) brokerage D) bankMargin %: Your margin account requires an initial margin of 50%, and a maintenance margin of 30%. You deposit $83,000 cash in a brokerage account and purchase stocks using all available margin and borrowing the rest from your broker. Later, the value of your stock holdings rises to $184,000. What is your percent return? O. 100.00% O. 10.84% O. 121.69% O. 21.69%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,…
- Based on the $10,000 drop in market value outlined in (5) to $30,000, what is the % gain/loss on your initial deposit? (5) You purchase $40,000 worth of stock by borrowing $20,000 from Morgan Stanley and paying $20,000 yourself. If the market value drops by $10,000, what is the remaining equity in your account?An investor buys $20,000 worth of a stock priced at $25 per share using 80% initial margin. The broker charges 5% on the margin loan and requires a 40% maintenance margin. The stock pays a $0.40 per share dividend in one year and then the stock is sold at $35 per share. What was the investor's rate of return?Suppose that Brue currently is selling at $50 per share. You buy 900 shares using $36,000 of your own money, borrowing the remainder of the purchase price from your broker. The rate on the margin loan is 7%. What is the percentage increase in the net worth of your brokerage account if the price of Brue immediately changes to (a) $56; (b) $50; and (c)$44?
