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    JQKVGWWPJ

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    Tony invested $10,000 at 5% annual interest for 4 years. The summary calculates how much more Tony could have earned investing the same amount at 6% annual interest instead. A limit-sell order instructs a broker to sell a stock at or below a specified price. Given $3,000 to invest and a 50% initial margin requirement, the summary determines how many shares of a $60 stock can be purchased.

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    JQKVGWWPJ

    Uploaded by

    bali
    20 views3 pages
    Tony invested $10,000 at 5% annual interest for 4 years. The summary calculates how much more Tony could have earned investing the same amount at 6% annual interest instead. A limit-sell order instructs a broker to sell a stock at or below a specified price. Given $3,000 to invest and a 50% initial margin requirement, the summary determines how many shares of a $60 stock can be purchased.

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    hi I hope this helps!! thank you so much!

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    Tony invested $10,000 at 5% annual interest for 4 years. The summary calculates how much more Tony could have earned investing the same amount at 6% annual interest instead. A limit-sell order instructs a broker to sell a stock at or below a specified price. Given $3,000 to invest and a 50% initial margin requirement, the summary determines how many shares of a $60 stock can be purchased.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    20 views3 pages

    JQKVGWWPJ

    Uploaded by

    bali
    Tony invested $10,000 at 5% annual interest for 4 years. The summary calculates how much more Tony could have earned investing the same amount at 6% annual interest instead. A limit-sell order instructs a broker to sell a stock at or below a specified price. Given $3,000 to invest and a 50% initial margin requirement, the summary determines how many shares of a $60 stock can be purchased.

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    Assignment 1

    1. Tony is investing $10,000 at 5%, compounded annually, for 4


    years. How much additional income could he earn if he had
    invested this amount at 6%, compounded annually? Please round
    the answer to two decimal points.
    469.70 is71�)))
    7
    2. Which of the following orders instructs the broker to sell at or
    below a specified price?
    Group of answer choices

    Stop-loss Order

    Limit-sell Order

    Limit-buy Order

    Market Order
    3. You want to purchase XYZ stock at $60 from your broker using
    as little of your own money as possible. If initial margin is 50%
    and you have $3000 to invest, how many shares can you buy?
    100

    You buy 300 shares of QTY for $30 per share and deposit initial
    margin of 50%. The next day stock price drops to $25 per share.
    What is your actual percentage margin?
    o New Stock value = $7500
    o Borrowed = $4500
    o Equity = $3000 （initial investment 減虧了的錢）
    o Margin% (New Stock Value - Loan) / New stock value
    = [Equity/New stock value] =$3000 /$7500 = 40%

    4a) You purchase 100 shares of Twitter (TWTR) at $27 per share.
    To pay the purchase, you borrow $1,000 from your broker. If
    Twitter falls to $25 per share, what is the remaining margin
    (percentage) in your account?

    This study source was downloaded by 100000875179733 from CourseHero.com on 02-06-2024 07:44:00 GMT -06:00

    https://www.coursehero.com/file/139773726/Assignment-1docx/
    New Position
    o New Stock value = $2500
    o Borrowed = $1000
    o Equity = $(1700-2x100)//$(2500-1000) =1500 （initial
    investment 減虧了的錢）
    o Margin% (New Stock Value - Loan) / New stock value
    = [Equity in account / Value of stock //Equity/New stock value] =$1500 /
    $2500 = 60%
    4b) If the maintenance requirement is 30%, will you receive a
    margin call when the price falls to $15? Ignore the interest rate
    on the loan
    o New Stock value = $1500
    o Borrowed = $1000
    o Equity = $(1700-12x100)//$(1500-1000) = 500 （initial
    investment 減虧了的錢）
    o Margin% (New Stock Value - Loan) / New stock value
    = [Equity in account / Value of stock //Equity/New stock value] =$500 /
    $1500 = 33.3%, no

    5) You sold short 200 shares of common stock at $60 per share.
    The initial margin is 60%. What's your initial investment?
    200 shares * $60/share * 0.60 = $12,000 * 0.60 = $7,200

    200x60-200x60x0.4=
    7200

    (200x60-P)/(200x60) = 0.60

    P=4800
    Stock Value= $60x200=$1200
    Borrowed= (200P-0.6x200P)/200P
    You purchased 200 shares of General Electric (GE) at $25 per share one
    year ago. To pay the purchase, you borrowed $2,000 from your broker. If
    now you sell all 200 shares at $24, what is the rate of return (percentage)
    on your account? Assume the interest rate on the loan over the borrowing
    period is 5%.

    6) You purchased 200 shares of General Electric (GE) at $25 per


    share one year ago. To pay the purchase, you borrowed $2,000

    This study source was downloaded by 100000875179733 from CourseHero.com on 02-06-2024 07:44:00 GMT -06:00

    https://www.coursehero.com/file/139773726/Assignment-1docx/
    from your broker. If now you sell all 200 shares at $24, what is the
    rate of return (percentage) on your account? Assume the interest
    rate on the loan over the borrowing period is 5%.

    Return when there is no borrowing


    = Profit / Investment = ($24x200-$25x200)/2,0005000 = -4 percent

    Return with 50 percent borrowing


    =(Profit- a broker call money rate x loan)/loan
    = (-200-0.05x2,000)/2,000 = -15 percent

    7. You are bearish on Apple (AAPL) and decide to sell short 500 shares at
    the current market price of $112 per share. How much in cash or
    securities must you put into your brokerage account if the broker’s initial

    margin requirement is 50%?

    Equity=500x$112-borrow

    Percentage margin=50%= (500x$112-borrow)/(500x$112)

    How high can the price of the stock go before you get a margin call if the

    maintenance margin is 40%?

    This study source was downloaded by 100000875179733 from CourseHero.com on 02-06-2024 07:44:00 GMT -06:00

    https://www.coursehero.com/file/139773726/Assignment-1docx/
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