# Assume you purchased 200 shares of ge common stock on

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11. Assume you purchased 200 shares of GE common stock on margin at \$70 per share from your broker. If the initial margin is 55%, how much did you borrow from the broker? A. \$6,000 B. \$4,000 C. \$7,700 D. \$7,000 E.\$6,300200 shares * \$70/share * (1 0.55) = \$14,000 * (0.45) = \$6,300.
12. You sold short 200 shares of common stock at \$60 per share. The initial margin is 60%. Your initial investment was
Calculation Checks: 10 points each 13. You purchased 100 shares of IBM common stock on margin at \$70 per share. Assume the initial margin is 50% and the maintenance margin is 30%. Below what stock price level would you get a margin call? Assume the stock pays no dividend; ignore interest on margin.
14. You purchased 300 shares of common stock on margin for \$60 per share. The initial margin is 60% and the stock pays no dividend. What would your rate of return be if you sell the stock at \$45 per share? Ignore interest on margin.
15. Assume you sell short 100 shares of common stock at \$45 per share, with initial margin at 50%. What would be your rate of return if you repurchase the stock at \$40/share? The stock paid no dividends during
16. You sold short 300 shares of common stock at \$55 per share. The initial margin is 60%. At what stock price would you receive a margin call if the maintenance margin is 35%?
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