What do you suppose the broker will do

Assignment Help Finance Basics
Reference no: EM132623065

Assume you purchased 900 shares of XYZ common stock on margin at $90 per share from your broker. If the initial margin is 65%, what is the amount you borrowed from the broker?

900 shares x $90 x ( 1 - 0.65 ) = 900 x $90 x ( 0.35 )  =28,350

Question, what do you suppose the broker will do if the market price of your stock drops to say $75.00 a share while you are still holding the stock and the margin loan is still outstanding?

Reference no: EM132623065

Questions Cloud

Analyze the effect of globalization on job quality : Contrast different viewpoints on globalization (i.e. neoliberal, world systems) and their arguments for and against the role of NGOs.
Although biometrics are commonly used in public : Although biometrics are commonly used in the public (law enforcement) sector, the use of biometrics in the private sector is becoming more common.
Discuss what information should be included : Discuss what information should be included and why. What negative impacts can occur when information is missing from a police report.
Prepare the appropriate adjusting entries for Waterway : Prepare the appropriate adjusting entries for Waterway as of December 31, 2017, to reflect the application of the "fair value" rule for the securities described
What do you suppose the broker will do : Assume you purchased 900 shares of XYZ common stock on margin at $90 per share from your broker. If the initial margin is 65%, what is the amount you borrowed f
How much will be in the account 10 years from today : Derek will deposit $4905 per year for 10 years into an account that earns 7%. The first deposit is made next year how much will be in the account 10 years from
How the teamsters union has supported its members : Discussing the origin of "Teamsters" union and the direction this union is going. Discuss how the Teamsters union has supported it's members and how the it has.
Conduct any data preparation that you need for the data set : Conduct any data preparation that you need for the data set - Investigate your Centroid Table, Folder View, and the other evaluation tools. Report your findings
Briefly describe these limitations in the Gray model : Briefly describe these limitations in the Gray model identified by Heidhues & Patel

Reviews

Write a Review

Finance Basics Questions & Answers

  Which security should the treasurer recommend

Both bonds have a $1,000 par value. The company is currently in the 34% marginal tax bracket. Which security should the treasurer recommend?

  Required rate of return and the internal rate of return

What is the difference in the Required Rate of Return and the Internal Rate of Return given the following information?

  Reduction of business costs

Improving a firm's sales and profit - Improving a company's customer services and Implementing flexible scheduling - Reduction of business costs

  Compute the present value of this stream of income

Now compute the present value of the income stream from the gold mine at a discount rate of 6%, and at a discount rate of 4%.

  What is the expected rate of return for the stock

Based on the following information, what is the expected rate of return for the stock?

  Steps you should take before buying a car

Explain the different car ownership options-cash payment, financing, leasing and list the advantages and disadvantages of each.

  What is the cost of equity for pittsburgh steel products

What is the cost of equity for Pittsburgh Steel Products? 9.66% 13.25% 12.84% 10.71% 11.55%

  What is her operating breakeven point in both units

Sandrina is trying to determine the breakeven point for her new business. She is selling widgets and expects them to sell for $12.40 each with a variable cost.

  Determine the interest rate

Determine the interest rate that would require a monthly total payment that is less than your current total payment. Also, refinancing costs you $2000 up-front in closing costs.

  Calculate the total current liabilities

Jenny prepares her own income tax return each year. A tax preparer would charge her $220 for this service. Over a period of 10 years, how much does Elaine gain from preparing her own tax return? Assume she can earn 7 percent on her savings.

  What is the mean for the log price relative

The mean rate of return on a stock is estimated at 20% while the volatility is 40%: The risk free interest rate is 5%: What is the mean for the log price relative?

  What are derivatives how can derivatives be used

What are derivatives? How can derivatives be used to reduce risk? Can derivatives be used to increase risk? Explain

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