Dée Trader opens a brokerage account and purchases 300 shares of Internet Dreams at $40 per share. She borrows $4,000 fr
Posted: Sun Jun 05, 2022 9:56 am
Dée Trader opens a brokerage account and purchases 300 shares of
Internet Dreams at $40 per share. She borrows $4,000 from her
broker to help pay for the purchase. The interest rate on the loan
is 8%. Required:
a. What is the margin in Dée’s account when she first purchases
the stock?
b. If the share price falls to $30 per share by the end of the
year, what is the remaining margin in her account?
c. If the maintenance margin requirement is 30%, will she
receive a margin call? multiple choice Yes No
d. What is the rate of return on her investment? (Negative value
should be indicated by a minus sign. Round your answer to 2 decimal
places.)
Internet Dreams at $40 per share. She borrows $4,000 from her
broker to help pay for the purchase. The interest rate on the loan
is 8%. Required:
a. What is the margin in Dée’s account when she first purchases
the stock?
b. If the share price falls to $30 per share by the end of the
year, what is the remaining margin in her account?
c. If the maintenance margin requirement is 30%, will she
receive a margin call? multiple choice Yes No
d. What is the rate of return on her investment? (Negative value
should be indicated by a minus sign. Round your answer to 2 decimal
places.)