What price will generate margin call if maintenance margin

Assignment Help Financial Management

Reference no: EM131456234

1. Your short 100 shares of T at $30 per share where your broker has an initial margin requirement of 55%. What price will generate a margin call if the maintenance margin is 25%?

(A) $10.80 (B) $13.20 (C) $34.80 (D) $37.20 (E) $49.60

2. You wish to open a brokerage margin account to employ a Betting Against Beta (BAB) Strategy. You plan to purchase $1000 of stock, A, with a Beta of 0.8 and short $500 in a stock, B, with a Beta of 1.2. What is the minimum amount in $ that you need to fund the new account prior to settlement of the two trades in three business days if you only employ margin on the short position and the initial margin is 50%?

(A) $750 (B) $1000 (C) $1250 (D) $1500 (E) $1750

Reference no: EM131456234

Questions Cloud

Amounts are to be debited and which are to be credited : identify which accounts and amounts are to be debited and which are to be credited.

What is your real rate of return : You purchase 100 shares of stock for $40 a share. What is your real (inflation-adjusted) rate of return if the inflation rate is 3%?

Uses flexible budgets to control its selling expenses : Fallon Company uses flexible budgets to control its selling expenses. Monthly sales are expected to range from $165,100 to $205,600.

Journal entries at the inception of the lease : Assume that IBM leased equipment that was carried at a cost of $150,000 to Disney company. journal entries at the inception of the lease.

What price will generate margin call if maintenance margin : What price will generate a margin call if the maintenance margin is 25%?

Beta on the portfolio be after the purchase of alpha stock : What will the expected return and beta on the portfolio be after the purchase of the Alpha stock?

Calculate the firms acid-test ratio : calculate the firm’s acid-test ratio

Estimating the company weighted average cost of capital : As a Financial Analyst of Falcon Alphine Ski Co. (FAS), you are in charge of estimating the company’s weighted average cost of capital.

What will be the firms new quick ratio : Lloyd Inc. has sales of $300,000, a net income of $30,000, and the following balance sheet: What will be the firm's new quick ratio?

User Account

All Pages