... company. The initial margin requirement is 40% and ABC’s stock price is currently K50. Ignore taxes, commissions and interest on the amount borrowed.
A. How many share of ABC can Rob buy from his margin account?
[4 MARKS]
B. What is Rob’s percentage return if he buys the stock on margin and the price increases to K55? [4 MARKS]
C. If the maintenance margin is 30%, at what price would Rob receive a margin call from his broker? [7 MARKS
If Rob has K40 000 in his margin account and he wants to use the money to buy shares of the ABC?
- Posted:
- 3+ months ago by Pchama
- Topics:
- money, price, company, interest, stock, account, requirement, taxes
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