Assume that six months ago you bought 2,500 shares of a stock at $70 per share using a margin. The margin rate was 40% and the interest rate on the margin loan was 8%. Assume no commissions. What is your gain or loss if the current stock price is $71 per share? A. -$1,700 B. $2,500 C. $6,700
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- Assume you sell short 100 shares of common stock at BDT $50per share, with initial margin at 0.5. The stock paid dividends during the period of $2.5. and you did not remove any money from the account before making the offsetting transaction. The interest is 7% if price at time of covering your position reached48. maintenance margin is 0.32 percent, calculate what is your account value what is your equity what is your equity after price changes'? what is your actual margin at what price the broker will give you a margin callwhat is your account value what is your equity what is your equity after price changes'? what is your actual margin at what price the broker will give you a margin calle what is your returnSuppose 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…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 $46 per share. You buy 250 shares using $8,000 of your own money, borrowing the remainder of the purchase price from your broker. The rate on the margin loan is 6%. Required: a. What is the percentage increase in the net worth of your brokerage account if the price of Xtel immediately changes to: (i) $48.76; (ii) $46; (iii) $43.24? What is the relationship between your percentage return and the percentage change in the price of Xtel? b. If the maintenance margin is 25%, how low can Xtel's price fall before you get a margin call? c. How would your answer to (b) change if you had financed the initial purchase with only $5,750 of your own money? d. What is the rate of return on your margined position (assuming again that you invest $8,000 of your own money) if Xtel is selling after 1 year at: (i) $48.76; (ii) $46; (iii) $43.24? What is the relationship between your percentage return and the percentage change in the price of Xtel? Assume that Xtel…Q.An investor buys $16,000 worth of a stock priced at $20 per share using 60% initial margin. The broker charges 8% on the margin loan and requires a 35% maintenance margin. The stock pays a $1-per-share dividend in 1 year, and then the stock is sold at $23 per share. What was the investor's rate of return? Which one is correct: A.21.63% B.25.28% C.23.83% D.28%Assume you purchased 2000 shares of XYZ common stock on margin at $ 30 per share from your broker . If the initial margin is 70 % , what is the interest payment on amount you borrowed from the broker if interest rate is 9 % ?
- 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?2. 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? 56.46% 50.75% 48.28% 46.56%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?
- Suppose that you just purchased 250 shares of Beta Banana's stock for $70 per share. The initial margin requirement is 70.0%, which means the amount borrowed is $5,250. The corresponding balance sheet is below: Liabilities and Equity Stock Total assets Margin percentage Assets Required: a. Now suppose the price of the stock falls to $41 per share. What is your current margin percentage? (Round your answer to 2 decimal places.) b. Construct the balance sheet to show the current situation. Stock Total assets $ 17,500.00 $ 17,500.00 c. If the maintenance margin is 50%, at what stock price would you get a margin call? (Round your answer to 2 decimal places.) Price Loan from broker. Equity Total liabilities and equity Assets % $ 5,250.00 $ 12,250.00 $ 17,500.00 Liabilities and Equity Loan from broker Equity Total liabilities and equityYou purchased 1000 shares of Company B's common stock on margin at $30 per share. Assume the initial margin is 50%, and the maintenance margin is 30%. Assume the stock pays no dividend; ignore interest on margin. Below what stock price level would you get a margin call?' "1Suppose you can buy 983 shares of Vertex Pharmaceuticals Incorporated (VRTX) stock on margin at $167 per share. Your initial margin is 51% and you borrow at the 7 percent. You sell your VRTX shares 6 months later for $185 per share. There were no dividends paid and the prices reflect commissions paid. What is your percent return if you buy on margin? [Enter the answer in as a percent (e.g., 5.55% = 5.55) - not a decimal]