Homework Answers
1. Total value of Shares = no of shares * Price = 1000* 40 = 40,000
Margin amount = 50%* 40,000 = 20,000
Margin Requirement = ( 1000* Share price - 20,000)/(1000* Share
Price) = 25%
1000* Share Price - 20,000 = 250 * Share Price
Max Share Price to get margin call = 20,000/750 = 26.67
2. Option b is correct. Hedge funds are not required to be
registered with the SEC whereas Mutual funds need to be
registered.
3. Option a is correct. ETF are traded all the time but not on Net
Asset value whereas Mutual Funds are traded on the absis of Net
Asset Value.
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