Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. on jan 1, you sold short 400 shares of at&t at

On Jan 1, you sold short 400 shares of AT&T at $35 per share. You post...

50.1K

Verified Solution

Question

Finance

  1. On Jan 1, you sold short 400 shares of AT&T at $35 pershare. You post $7000 to the margin account. On April 1, youreceived a margin call on this trade. Assume the minimum marginrequirement is 40%, what is the price of the stock that triggeredthe margin call?

$29.17

$37.5

$39.25

$43.75

None of the above

  1. You are an investment advisor for Alan and Jimmy. You've helpedthem optimally allocate their investment portfolios along the samecapital allocation line (CAL). If Alan's portfolio has a higherweight on risk-free asset than Jimmy's portfolio, then which of thefollowing statements MUST be true:

    [I]   Alan’s portfolio has lower expected returnsthan Jimmy’s
    [II]  Alan is less risk-averse than Jimmy
    [III] Alan must hold a positive position in the risky asset

I only

I and II

I and III

II and III

I, II, and III

  1. On January 1, you sold short 200 shares of Walt Disney Co at$150 per share and pledged 50% initial margin. On March 1, adividend of $10 per share was paid. On June 1, you closed yourposition buying 200 shares at $170 per share. What is your rate ofreturn?

-30%.

-35%.

-40%.

-70%

None of the above

Answer & Explanation Solved by verified expert
4.3 Ratings (770 Votes)
1 Particulars Amount Margin amount 7000 Margin requirement 40 Total amount can be traded 17500 No of Shares 400 Average price at which margin call required    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

y'''-8y=e^ix by the method of variation of parameters

Advance Math
Q

How effective is gastric bypass surgery in maintaining weight loss in extremely obese people? A study...

Statistics
Q

1. You deposit $3000 each year into an account earning 7% interest compounded annually. How much...

Advance Math
Q

Some disorders such as Adjustment Disorder or PTSD have clearly identifiable stressors. The disorder is preceded...

Psychology
Q

International Business Case Study question for The Mouse that Roared: How is an actual exchange rate...

Operations Management
Q

For a particle performing S H M when displacement is x the potential energy and...

Physics
Q

e graph of f to complete parts a through I If a limit ot exist...

Calculus
Q

A bag contains 6 red marbles 6 orange marbles and 4 blue marbles Find P...

Algebra
Q

Kano International Publishing, headquartered in Berlin, Germany, is a leading global publisher of scientific, technical,...

Accounting
Q

Mona owns a rental house that she has rented to various tenants since September of...

Accounting
Q

Jackson Company is using the net present value method. If a company's required rate of...

Accounting
Q

4 Hrubec Products, Inc., operates a Pulp Division that manufactures wood pulp for use in...

Accounting