1. The price of Facebook stock is currently $43.18 and you decide to buy 170...
90.2K
Verified Solution
Link Copied!
Question
Finance
1. The price of Facebook stock is currently $43.18 and you decide to buy 170 shares on margin. The inital margin is 60%.
a. How much money will you borrow from the broker if you borrow as much as possible?
b. If the price falls to $38.72, what is the new percentage margin in the account?
c. If the broker's maintenance margin is 40%, what is the minimum value the stock price can take before you are issued a margin call?
2. The stock price of Apple is $106. You have $10,000 to invest. The monthly interest rate is 0.5%.
a. You think the stock price will go up soon, and want to trade 120 shares. What should you do? Enter 120 for buying 120 shares (on margin if necessary), or -120 for selling or short-selling 120 shares.
b. What is your initial percentage margin (entered as a decimal number)?
c. Two months later, the stock price is $126. What is your percentage margin (entered as a decimal number)?
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
