Chapter02CorradoJordanRex - Chapter 2 Problems 1-26 Input...

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Chapter 2 Problems 1-26 Input boxes in tan Output boxes in yellow Given data in blue Calculations in red Answers in green NOTE: Some functions used in these spreadsheets may require that the "Analysis ToolPak" or "Solver Add-in" be installed in Excel. To install these, click on "Tools|Add-Ins" and select "Analysis ToolPak and "Solver Add-In."
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Chapter 2 Question 1 Calculating margin Input Area: Stock price $75 Dollars to invest $12,000 Initial margin 50% Output Area: Maximum investment $24,000 =D8/D9 Maximum shares 320 =D15/D7
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Chapter 2 Question 2 Calculating margin Shares of stock 500 Stock price $60 Required deposit $18,000 Output Area: Margin loan $12,000 =D5*D6-D7 Initial margin 60.00% =D7/(D5*D65)
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Chapter 2 Question 3 Margin return Shares of stock 500 Stock price $60 Margin $18,000 Margin requirement 60% Terminal stock price $70 Terminal stock price $50 Output Area: When stock price is $70 Return with margin 27.78% =D5*(D9-D6)/D7 Return without margin 16.67% =(D9-D6)/D6 When stock price is $50 Stock price Return with margin -27.78% 70 Return without margin -16.67% 50
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Return margin no margin 27.78% 16.67% 27.78% 16.67% -27.78% -16.67%
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Chapter 2 Question 4 Margin Shares of stock 500 Stock price $60 Terminal stock price $70 Terminal stock price $50 Initial margin 40% Output Area: Equity $12,000.00 When stock price is $70 Return with margin 41.67% =(D7-D6)/(D6*D9) Return without margin 16.67% =(D7-D6)/D6 When stock price is $50 Stock price 70 Return with margin -41.67% 50 Return without margin -16.67%
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Return margin no margin 41.67% 16.67% 41.67% 16.67% -41.67% -16.67%
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Chapter 2 Question 5 Margin purchases Input Area: Dollars to invest $10,000 Initial margin 60% Output Area: Maximum investment $16,666.67 =D7/D8
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Chapter 2 Question 6 Margin calls Input Area: Share price $110 Initial margin 60% # of shares 1,200 Maintenance margin 35% Output Area: Total stock purchase $132,000 =D9*D7 Account equity $79,200 =D16*D8 Amount borrowed $52,800 =D16-D17 P* $67.69 =(D18/D9)/(1-D10)
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Chapter 2 Question 7 Margin calls Input Area: Share price $42 Initial margin 50% # of shares 5,000 Maintenance margin 25% Output Area: Total stock purchase $210,000 =D7*D9 Account equity $105,000 =D8*D16 Amount borrowed $105,000 =D16-D17 P* $28.00 =(D18/D9)/(1-D10) Percentage stock decline -33.33% =(D19-D7)/D7
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Chapter 2 Question 8 Margin calls on short sales Input Area: Short shares 700 Share price $92 Initial margin 50% Maintenance margin 30% Output Area:
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Chapter02CorradoJordanRex - Chapter 2 Problems 1-26 Input...

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