Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. you are bullish on telecom stock. the current mark

You are bullish on Telecom stock. The current market price is $250 per share, and...

90.2K

Verified Solution

Question

Accounting

image
image
You are bullish on Telecom stock. The current market price is $250 per share, and you have $22,000 of your own to invest. You borrow an additional $22,000 from your broker at an interest rate of 6% per year and invest $44,000 in the stock. a. What will be your rate of return if the price of Telecom stock goes down by 8% during the next year? The stock currently pays no dividends. (Negative value should be indicated by a minus sign. Enter your answer as a percent rounded to the nearest whole number.) Rate of return % b. How far does the price of Telecom stock have to fall for you to get a margin call if the maintenance margin is 30%? Assume the price fall happens immediately. (Round your answer to 2 decimal places.) Margin call will be made at price or lower

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!
Become a Member

Other questions asked by students

Q

1a. A spliceosome will be found in a. prokaryotic cells only b. eukaryotic cells only c. both eukaryotic and prokaryotic cells 1b. Which type...

Biology
Q

A factory emits steam into the air. How could those same water molecules eventually reside in...

Physics
Q

Match the following examples with the corresponding component of classical conditioning. Acquisition, Stimulus generalization, extinction, Stimulus discrimination,...

Psychology
Q

A shell and tube type of heat exchanger with one shell pass and two tube passes...

Mechanical Engineering
Q

c 0 1mg Asmg 0 Two blocks A and B of masses 10 kg and...

Physics
Q

Choose the correct answer Economists generally agree that America is considered at full employment when...

Basic Math
Q

als Questi ind the critical value z necessa c 0 96

Statistics
Q

the banking system is able to make new loans equal to a multiple of total...

Accounting
Q

Exercise 10-7A Prepare the stockholders' equity section (LO10-7) Finishing Touches has two classes of stock...

Accounting
Q

Quindo Table Company manufactures tables for schools. The 2015 operating budget is based on sales...

Accounting
Q

When you undertook the preparation of the financial statements for Pharoah Company at January 31,...

Accounting
Q

Explain the Sarbanes Oxley Act. Do you feel that embracing an act like this would...

Accounting