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Assume you purchased 200 shares of GE common stock on margin at $70 per share...

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Finance

  1. 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?
  1. $6,000
  2. $4,000
  3. $7,700
  4. $7,000
  5. $6,300

  1. 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.
  1. $21
  2. $50
  3. $49
  4. $80
  5. none of the above

  1. You sold short 100 shares of common stock at $45 per share. The initial margin is 50%. At what stock price would you receive a margin call if the maintenance margin is 35%?
  1. $50
  2. $65
  3. $35
  4. $40
  5. none of the above

  1. Consider the following three stocks:

Stock Price Number of shares outstanding

A $40 200

B $70 500

C $10 600

The price-weighted index constructed with the three stocks is

  1. 30
  2. 40
  3. 50
  4. 60
  5. 70

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