BUS 5446 (DUTTA) CHAPTER 3 HOMEWORK You have a brokerage account with the following terms: You have a margin trading account with 50% initial margin and 35% maintenance margin. The interest rate on...

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You deposit $15,000 of your own money in the account. You will use all of it to buy on margin a stock

trading at $50 per share.

a) Calculate the price at which you will receive a margin call (5 pts)
b) Calculate your ROI – if after 3 months the share pays a dividend of $0.35 per share and is trading at

$56.50 per share. (5 pts)



BUS 5446 (DUTTA)CHAPTER 3 HOMEWORK You have a brokerage account with the following terms: You have a margin trading account with 50% initial margin and 35% maintenance margin. The interest rate on your loans is 8% per year. 1. You deposit $15,000 of your own money in the account. You will use all of it to buy on margin a stock trading at $50 per share. a) Calculate the price at which you will receive a margin call (5 pts) b) Calculate your ROI – if after 3 months the share pays a dividend of $0.35 per share and is trading at $56.50 per share. (5 pts) 2. You deposit $15,000 of your own money in the account. You will use all of it to short sell on margin a stock trading at $30 per share. a) Calculate your ROI – if after 3 months the share pays a dividend of $0.75 per share and is trading at $35 per share. (5 pts) b) Calculate the price at which you will receive a margin call (5 pts)
Answered Same DayJan 31, 2022

Answer To: BUS 5446 (DUTTA) CHAPTER 3 HOMEWORK You have a brokerage account with the following terms: You have...

Prateek answered on Feb 01 2022
108 Votes
1)
(i)
(ii) Number of Shares Purchased,
Amount Taken on Loan,
ROI,
Thus, ROI is 25.40%.
2)

a. No. of Shares Purchased,
ROI,
Thus, the ROI is -14.16%.
b. Margin Call at,
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