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QUESTION 16 You borrow $8,000 from your broker and put in $10,000 to...

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Finance

QUESTION 16

  1. You borrow $8,000 from your broker and put in $10,000 to purchase 100 shares of Disney at the price of $180 per share. The maintenance margin is 40%. How far can the stock price of Disney fall before you will get a margin call? Assume there is no interest.

    76.92

    133.33

    124.35

    98.54

0.3 points

QUESTION 17

  1. The arithmetic average of 8%, -17%, and 15% is ________.

    4.5%

    2%

    3.4%

    5%

0.3 points

QUESTION 18

  1. The holding-period return on a stock was 20%. Its beginning price was $30, and its cash dividend was $1. Its ending price must have been _________.

    $28.50

    $27

    $35

    $42

0.3 points

QUESTION 19

  1. Assume you short sell 100 shares of IBM common stock at $125 per share. If the initial margin is 50%, what is the amount that you put in as cash buffer?

    $3750

    $12500

    $4500

    $6250

0.3 points

QUESTION 20

  1. A loan for a new car costs the borrower 0.5% per month. What is the EAR?

    .80%

    5.08%

    10.03%

    6.17%

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