Question

Dée Trader opens a brokerage account, and purchases 390 shares of Internet Dreams at $72 per share. She borrows $3,610 from her broker to help pay for the purchase (Ignore transaction costs). The interest rate on the loan is 8%.

Requirement 1:

What is the margin (aka, $ of equity) in Dée's account when she first purchases the stock? (Omit the "$" sign in your response.)

Margin

$

Requirement 2:
(a)	If the share price falls to $62 per share by the end of the year, what is the remaining margin (aka, $ of equity) in her account? (Round your answer to the nearest dollar amount.Omit the "$" sign in your response. Also, remember to include interest on the margin loan for one period for this question)

Remaining margin

$

(b)	If the maintenance margin requirement is 34%, will she receive a margin call?
	(Click to select)YesNo

    

Requirement 3:

What is the rate of return on her investment? (Round your answer to 2 decimal places. Negative amount should be indicated by a minus sign. Omit the "%" sign in your response. Also, remember to include interest on the margin loan for one period for this question)

Rate of return

%

Answer 1