Questions from General Investment

Q: Miguel Torres purchased 100 shares of CantWin.com.com for

Miguel Torres purchased 100 shares of CantWin.com.com for $50 per share, using as little of his own money as he could. His broker has a 50% initial margin requirement and a 30% maintenance margin requ...

Q: Jerri Kingston bought 100 shares of stock at $80 per share

Jerri Kingston bought 100 shares of stock at $80 per share using an initial margin of 50%. Given a maintenance margin of 25%, how far does the stock have to drop before Jerri faces a margin call? (Ass...

Q: An investor buys 200 shares of stock selling at $80 per

An investor buys 200 shares of stock selling at $80 per share using a margin of 60%. The stock pays annual dividends of $1 per share. A margin loan can be obtained at an annual interest cost of 8%. De...

Q: Marlene Bellamy purchased 300 shares of Writeline Communications stock at $55

Marlene Bellamy purchased 300 shares of Writeline Communications stock at $55 per share using the prevailing minimum initial margin requirement of 50%. She held the stock for exactly four months and s...

Q: Not long ago, Jack Edwards bought 200 shares of Almost Anything

Not long ago, Jack Edwards bought 200 shares of Almost Anything Inc. at $45 per share; he bought the stock on margin of 60%. The stock is now trading at $60 per share, and the Federal Reserve has rece...

Q: You own 500 shares of Ups & Downs, Inc., stock

You own 500 shares of Ups & Downs, Inc., stock. It is currently priced at $50. You are going on vacation, and you realize that the company will be reporting earnings while you are away. To protect you...

Q: You have $5,000 in a 50% margin account

You have $5,000 in a 50% margin account. You have been following a stock that you think you want to buy. The stock is priced at $52. You decide that if the stock falls to $50, you would like to buy it...

Q: The table below shows the annual change in the average U.

The table below shows the annual change in the average U.S. home price from 2005 to 2014 according to the S&P/Case-Shiller Index. Calculate the average annual return and its standard deviation. Co...

Q: An investor short sells 100 shares of a stock for $20

An investor short sells 100 shares of a stock for $20 per share. The initial margin is 50%, and the maintenance margin is 30%. The price of the stock falls to $12 per share. What is the margin, and wi...

Q: What role do an investor’s portfolio objectives play in constructing a portfolio

What role do an investor’s portfolio objectives play in constructing a portfolio?