Securities markets-will you receive margin call

Assignment Help Financial Management
Reference no: EM131322484

Week 2 Individual Assignment - Securities Markets You've borrowed $45,000 on margin to buy 1,000 shares in Disney, which is now selling at $90 per share. Your account starts at the initial margin requirement of 50%. The maintenance margin is 35%. Two months later, the stock price has declined to $68 per share.

1. Will you receive a margin call?

2. How low can the price of Disney shares fall before you receive a margin call?

Please provide numerical values for both questions

Reference no: EM131322484

Questions Cloud

Why are psychologists sometimes interested in epidemiology : Why are psychologists sometimes interested in epidemiology?- Why do researchers use probability rather than nonprobability samples when doing descriptive research?
What has been interesting aspect of environmental science : What has been the most interesting aspect of environmental science that you have learned? Has your new understanding of environmental sustainability changed the way you view the environment?
Assume that the required reserve requirement : Assume that the required reserve requirement is 10% on checkable deposits and that a bank has $150 million in checkable deposits. If the bank has $ 20 million in total reserves, what amount of excess reserves does this bank hold?
What happens to error of estimation as ones sample size : What does the error of estimation tell us about the results of a study conducted using probability sampling?- What happens to the error of estimation as one's sample size increases?
Securities markets-will you receive margin call : Week 2 Individual Assignment - Securities Markets You've borrowed $45,000 on margin to buy 1,000 shares in Disney, which is now selling at $90 per share. Your account starts at the initial margin requirement of 50%. Will you receive a margin call? Ho..
Agency theory and the stewardship theory : Discuss the differences between the "agency theory" and the "stewardship theory". Explain which of these theories applies to your strategic audit firm and why?
What can you do to change your behaviors : What you've learned in this course, outline the three most important aspects of the environment that we should protect at the highest priority. How do your current behaviors affect these three things? What can you do to change your behaviors?
What will be the goals of counseling : Write a 750-1,000-word analysis of the case study using a psychoanalytic theory approach. Include the following in your analysis. What will be the goals of counseling and what intervention strategies are used to accomplish those goals? Is your theor..
How you use cluster sampling to obtain probability sample : Suppose that you wanted to study children who have Down syndrome.- How might you use cluster sampling to obtain a probability sample of children with Down syndrome in your state?

Reviews

Write a Review

Financial Management Questions & Answers

  Find out which countries have joined the euro area recently

Find out which countries have joined the euro area recently or are likely to join soon. Why are these countries joining while others in the European Union are still left out?

  What is the coupon rate of the bond

Beam inc. bonds are trading today for a price of $588.12. the bond currently has 23 years until maturity has a yield to maturity of 9.45%. the bond pays annual coupons and the next coupon is due in one year. what is the coupon rate of the bond?

  What is the length of cash conversion cycle

Prestopino Corporation produces motorcycle batteries. Prestopino turns out 1,500 batteries a day at a cost of $6 per battery for materials and labor. It takes the firm 22 days to convert raw materials into a battery. What is the length of Prestopino’..

  Evaluate the proposed acquisition of a new special

You have been asked by the president of your company to evaluate the proposed acquisition of a new special-purpose truck for $60,000. The truck falls into the MACRS 3-year class, and it will be sold after three years for $20,900. The firm’s marginal ..

  What is the projects net present value

Empire Industries is considering adding a new product to their lineup. This product is expected to generate sales for four years after which time the product will be discontinued. What is the project's net present value if the firm wants to earn a 13..

  What is the price of put option with the same exercise price

A stock is currently selling for $79 per share. A call option with an exercise price of $83 sells for $3.95 and expires in three months. If the risk-free rate of interest is 2.8 percent per year, compounded continuously, what is the price of a put op..

  Banking regulators were watching out for the public good

The authors of the Financial Crisis Inquiry Report were not concerned that from 1999 to 2008, the financial sector expended $2.7 billion in reported federal lobbying expenses; individuals and political action committees in the sector made more than $..

  What is the most willing to pay for gamma common stock now

You are considering the purchase of a share, gamma incorporate it common stock. You expect to sell it at the end of one year for $56 per share. You will receive $2.56 per share the end of the next year. If you're required return on the stock is 8.3% ..

  What is the current price of van burens stock

Harrison Corporation is interested in acquiring Van Buren Corporation. Assume that the risk-free rate of interest is 4% and the market risk premium is 8%. Van Buren currently expects to pay a year-end dividend of $2.85 a share (D1 = $2.85). Van Buren..

  High proportion of debt in its capital structure

Which of the following would not be a characteristic of a firm that would tend to have a high proportion of debt in its capital structure?

  Amortization of bond premium on the straight-line method

January 1, 2011, Gonzalez Corporation issued $44,511 10% 14-year bonds at 103. Gonzalez has recorded amortization of the bond premium on the straight-line method (which was not materially different from the effective-interest method).

  Verify that put call parity holds

Use DerivaGem to value the option assuming it is a European call. - Use DerivaGem to value the option assuming it is a European put.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd