1. The price of Facebook stock is currently at $31.54 and you decide to buy...
50.1K
Verified Solution
Link Copied!
Question
Finance
1. The price of Facebook stock is currently at $31.54 and you decide to buy 120 shares on margin. You borrow $1,500 from your broker and finance the remainder of the purchase with your own cash. a. What is your initial percentage margin? b. If the price rises to $35, what is the net return? c. If the broker's maintenance margin is 40%, what is the minimum value that Facebook stock price can take before you are issued a margin call?
2. You buy 400 shares of stock at a price of $37.79. The initial margin requirement is 50% and the maintenance margin is 30%. a. How much do you borrow? b. At what price will you first receive a margin call?
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!
