You purchased 100 shares of Apple common stock on margin at $100 per share. Assume the initial margin is 60% and the maintenance margin is 40%. (Assume the stock pays no dividends, and ignore interest on the margin loan.) (a) At what price will you get a margin call? (b) What is your return when you get a margin call?
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- You have borrowed $45,000 on margin to buy shares in Tencent, which is now selling at $120 per share. Your account starts at the initial margin requirement of 50%. The maintenance margin is 30%. Two days later, the stock price falls to $105 per share. a. What is the current margin and will you recieve a margin call? b. How low can the price of the shares fall before you recieve a margin call?You’ve borrowed $20,000 on margin to buy shares in Ixnay, which is now selling at $40 per share. Your account starts at the initial margin requirement of 50%. The maintenance margin is 35%. Two days later, the stock price falls to $35 per share.a. Will you receive a margin call?b. How low can the price of Ixnay shares fall before you receive a margin call?Assume you purchased 200 shares of GE common stock on margin at $70 per share from your broker. If the initial margin is 55%, how much did you borrow from the broker? Assume you sold short 100 shares of common stock at $40 per share. The initial margin is 50%. What would be the maintenance margin if a margin call is made at a stock price of $50?
- You have borrowed $45,000 on margin to buy shares in Tencent, which is now selling at $120 per share. Your account starts at the initial margin requirement of 50%. The maintenance margin is 30%. Two days later, the stock price falls to $105 per share. a. What is the current margin and will you recieve a margin call? b. How low can the price of Baidu shares fall before you recieve a margin call?You purchased 200 shares of ABC common stock on margin at $50 per share. Assume the initial margin is 50% and the maintenance margin is 30%. You will get a margin call if the stock drops below what price? (Assume the stock pays no dividends and ignore interest on the margin loan.)A customer bought 500 Boeing shares at $30 a piece with 50% initial margin and 35% maintenance margin. The stock price declined to $14. What is the actual margin now? If he receives a margin call, how much money the customer would’ve needed to deposit to avoid forced sell?
- Suppose that you sell short 1,000 shares of Xtel, currently selling for $20 per share, and give your broker $15,000 to establish your margin account.a. If you earn no interest on the funds in your margin account, what will be your rate of return after one year if Xtel stock is selling at: (i) $22; (ii) $20; (iii) $18? Assume that Xtel pays no dividends.b. If the maintenance margin is 25%, how high can Xtel’s price rise before you get a margin call?c. Redo parts (a) and (b), but now assume that Xtel also has paid a year-end dividend of $1 per share. The prices in part (a) should be interpreted as ex-dividend, that is, prices after the dividend has been paid..Suppose that you sell short 1,000 shares of Xtel, currently selling for $20 per share, and give your broker $15,000 to establish your margin account. a.If you earn no interest on the funds in your margin account, what will be your rate of return after one year if Xtel stock is selling at: (i) $22; (ii) $20; (iii) $18? Assume that Xtel pays no dividends. b.If the maintenance margin is 25%, how high can Xtel’s price rise before you get a margin call? c.Redo parts (a) and (b), but now assume that Xtel also has paid a year-end dividend of $1 per share. The prices in part (a) should be interpreted as ex-dividend, that is, prices after the dividend has been paid.13.Suppose that you sell short 1,000 shares of Xtel, currently selling for $20 per share, and give your broker $15,000 to establish your margin account. a. if you earn no interest on the funds in your margin account, what will be your rate of return after one year if Xtel stock is selling at: $22, $20, and $18? Assume that Xtel's pays no dividends. b. If the maintenance margin is 25%, how high can Xtel's price rise before you get a margin call? c. Redo parts a and b but now assume that Xtel has paid a year end dividend of $1 per share. The pruces in part a should be interpreted as ex-dividend, that is prices after the dividend has been paid.
- You have $40,000 to invest in a stock trading at $25 per share. Your brokerage firm has a 60% initial margin limit (which you fully use) and a 30% maintenance margin limit. You shorted the stock at $25 per share, but it rose in value to $28 per share. How much $$equity is in your account now? What is your percent gain/loss? Based on the information, at what price could you get a margin call (P*)?You 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?You opened a margin account with borrowing $50,000 from your broker a year ago. Your account started at the initial margin requirement of 50%. With the margin account you bought ABC stock at $50 per share. The maintenance margin is 35%. Today, the stock price falls to $45 per share. Assume interest rate is 10%. What is the margin (your equity) in your account when you first purchase the stock? Will you receive a margin call? (Please consider interest expenses and Show percentage margin after price falls) How low can the price of ABC shares fall before you receive a margin call? Please show both with and without interest expenses. What is your rate of return (Consider Interest Expenses)?