guaranteed like Suppose that Tesla Inc stock (TSLA) currently is selling at $799.5 per share....
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guaranteed like
Suppose that Tesla Inc stock (TSLA) currently is selling at $799.5 per share. You have $1,380,000 cash in your account. You are bullish on the stock and decided to take a position using all your money. Your financial advisor at TD Bank provided you with an options to invest:
Open a margin account, where you can invest with all your cash and also borrow additional amount from your broker to buy the shares. The initial margin requirement is 50%, and the minimum margin requirement is 30%. The interest rate charged on the margin loan will be 9% per year.
how much maximum you can borrow? How many shares maximum you can buy in the margin account? (4 marks)
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