What is rate of return on her investment

Assignment Help Financial Management

Reference no: EM132074313

Dee Trader opens a brokerage account and purchases 100 shares of Internet Dreams at $56 per share. She borrows $3,500 from her broker to help pay for the purchase. The interest rate on the loan is 9%.

a. What is the margin in Dee’s account when she first purchases the stock?

Margin $

b-1. If the share price falls to $46 per share by the end of the year, what is the remaining margin in her account? (Round your answer to 2 decimal places.)

Remaining margin %

b-2. If the maintenance margin requirement is 30%, will she receive a margin call?

Yes

c. What is the rate of return on her investment? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)

Rate of return %

Reference no: EM132074313

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