Question
Do not use Excel please, show work
Margined Long Position Name Date Suppose that an investor buys 300 shares on margin at $40 per share. The initial margin is 50% and the maintenance margin is 30%. After one year, the investor sells the shares for $38 and closes the long position. During the holding period, the shares paid a dividend of S1.30 per share. Interest on the margin loan is 7% annual. Show the calculations for the numbers you enter in the T accounts. a. Show the investors beginning T account. At what price would this investor receive a margin call? (cales here) b Show thiter ectul mg price? (calcs, here) c. Calculate the investors return for the holding period.
0 0
Add a comment Improve this question Transcribed image text
Know the answer?
Add Answer to:
Do not use Excel please, show work Margined Long Position Name Date Suppose that an investor...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Do not use excel please, show work Short Position Name: Date: Suppose that an investor sells...

    Do not use excel please, show work Short Position Name: Date: Suppose that an investor sells 400 shares short at S50 per share. The initial margin is 50% and the maintenance margin is 30%. After 125 days, the investor purchases the shares for S40 and closes the short position. During the holding period, the shares paid a dividend of $2.50 per share. Show the calculations for the numbers that you enter in the "T" accounts a. Show the investor's beginning...

  • 3. CL shares are selling at $71.40. An investor sells 1000 shares of CL short. The...

    3. CL shares are selling at $71.40. An investor sells 1000 shares of CL short. The initial margin requirement is 35 percent, maintenance margin is 20%, and the commission is $4.95 per trade. After 180 days, the price goes down to $69.75 and the investor closes out the short position. While the investor is in the short position, CL pays $0.85 per share dividends. What is a. the annualized rate of return? b. the price at which there will be...

  • Please show all calculations, no handwritten solutions John Q. Investor takes a short position on 3,000...

    Please show all calculations, no handwritten solutions John Q. Investor takes a short position on 3,000 shares of Macy's(M), selling at $178.77 per share on February 11. Dividends are estimated at $24 per year paid quarterly, and the last Ex-date was December 31. JQ's broker charges him $500 for the loan of the shares every six months.JQ covers his position on May 12 at $188.91 a. At the time of the initial sell JQ's broker must deposit to JQ's margin...

  • An investor buys $15 thousand dollars of ABT stock at $20 per share, using 59% initial...

    An investor buys $15 thousand dollars of ABT stock at $20 per share, using 59% initial margin. The broker charges 7% APR compounded daily on the loan, and requires a 35% maintenance margin. The stock pays $0.57 per share dividend each year. If the stock is sold at the end of the year at $21 per share, what is the investor's rate of return? You sell short 200 shares of BSX at $50 per share. You post the 50% margin...

  • (3) An investor buys $8,000 worth of a stock priced at $40 per share using 50%...

    (3) An investor buys $8,000 worth of a stock priced at $40 per share using 50% initial margin. The broker charges 6% on the margin loan and requires a 30% maintenance margin. In one year the investor has interest payable and gets a margin call. What is the stock price that triggers the margin call? How much additional cash should the investor put in his account to restore the 50% initial margin after receiving the margin call? Suppose that the...

  • QUESTION 5 An investor buys $19 thousand dollars of ABT stock at $20 per share, using...

    QUESTION 5 An investor buys $19 thousand dollars of ABT stock at $20 per share, using 52% initial margin. The broker charges 7% APR compounded daily on the loan, and requires a 35% maintenance margin. The stock pays $0.5 per share dividend each year. If the stock is sold at the end of the year at $22 per share, what is the investor's rate of return? Enter answer in percents, accurate to 2 decimal places. QUESTION 6 You sell short...

  • QUESTION 39 Problem 3a (5 pts.) An investor buys 2 Silver contracts (long position) on the...

    QUESTION 39 Problem 3a (5 pts.) An investor buys 2 Silver contracts (long position) on the Chicago Board of Trade (CBOT) on May 7 for delivery in July that same year. The following information relates to the silver contract and silver prices on the date of purchase. • Current futures contract price: $15.00 per oz. • Size of contract: 5000 oz. • Initial margin requirement: 5% of initial contract value • Maintenance margin level: 3.5% of initial contract value 3A....

  • 3. Define Short Sales. Make sure you explain what a long position and a short position...

    3. Define Short Sales. Make sure you explain what a long position and a short position are. a. Now assume that that you short 500 shares of AT&T (T) at S50 per share. Your broker has a 40% initial margin. How does this look in the balance sheet? Liabilities and Account Equity b. Your broker has a maintenance margin of 30%. If the price of the stock falls to $30 per share, what is your new margin? Are you benefited...

  • Please explain in details 1 2 3 An investor has an initial margin requirement of 50%...

    Please explain in details 1 2 3 An investor has an initial margin requirement of 50% on his margin account and a maintenance margin requirement of 25%. The investor short sold 1,000 shares at $ 40 per share. What is the maximum price that the share can reach in the market before the investor receives a margin call? The difference between mutual funds and hedge funds is There is no difference since there are both managed portfolios Hedge funds are...

  • Please solve it by hand or typing, don't use EXCEL. For D Draw the time line...

    Please solve it by hand or typing, don't use EXCEL. For D Draw the time line to show cash flow. 1. XYZ stock price and dividends history are as follows Year Beginning-of-year price Dividend paid at year- $100 $110 $90 $95 end $4 $4 $4 $4 2005 2006 2007 2008 An investor buys three shares of XYZ at the beginning of 2005, buys another two shares at the beginning of 2006, sells one share at the beginning of 2007, and...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT