Initial Margin Assignment
February 18th, 2020
You are investing in 100 shares of a stock with the market value of $10,000. Suppose you invest $7000 of your own money and borrow the remaining $3,000 on margin at 6%. What is your initial margin?
answers- 70%, 30%, 50%, 10%
Using the information in the previous problem and assuming a 30% maintenance margin, how far can the price falls before you get a margin call?
answers- 32.25, 51.25, 24.12, 42.85
if you sell securities in the Previous problem a year later for $12,000, what is your actual return on this investment?
answers- 26%, 12%, 31%, 15%. Get Finance homework help today