You purchased 1,200 shares of stock on margin for $53 per share and sold the shares 3 months later for $58.60 per share. The initial margin requirement was 55 percent and the maintenance margin was 35 percent. The interset rate on the margin loan was 8 percent. You received no dividend income. What was your holding period return?
Initial investment = 1,200 × $53 × .55 = $34,980
Loan repayment = [1,200 × $53 × (1 - .55)] × (1.08)3/12 = $29,175.99
Holding period return = [(1,200 × $58.60) - $29,175.99 - $34,980] / $34,980 = 17.62%
You purchased 1,200 shares of stock on margin for $53 per share and sold the shares...
Allan purchased 500 shares of stock on margin for $31.75 a share and sold the shares five months later for $34.50 a share. The initial margin requirement was 65 percent and the maintenance margin was 30 percent. The interest rate on the margin loan was 8.5 percent. He received no dividend income. What was his holding period return?
Rudolfo purchased 900 shares of stock for $62.20 a share and sold them ten months later for $64.60 a share. The initial margin requirement on this stock is 75% and the maintenance margin is 40%. Ignoring dividends and costs, what is his holding period return?
You just sold 1,200 shares of stock short at a price per share of $13.50. The initial margin requirement is 60 percent and the maintenance margin is 30 percent. What is your initial equity position? $6,480 $7,520 $9,720 $10,520 $16,200
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Marlene Bellamy purchased 500 shares of Writeline Communications stock at $55.02 per share using the prevailing minimum initial margin requirement of 58%. She held the stock for exactly 44 months and sold it without any brokerage costs at the end of that period. During the 44-month holding period, the stock paid $1.63 per share in cash dividends. Marlene was charge 7.5% annual interest on the margin loan. The minimum maintenance margin was 25 % a. Calculate the initial value of...