Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. you believe that the stock price of sander's corpo

You believe that the stock price of SANDER'S Corporation will decline next year. The current...

70.2K

Verified Solution

Question

Finance

You believe that the stock price of SANDER'S Corporation will decline next year. The current stock price is $160 and you want to short sell 300 stocks. Your broker requires 65% initial margin and 40% maintenance margin. Ignore interest and dividends.

27. How much should you deposit in your brokerage account? *

A) $48,000

B) $31,200

C) $16,800

D) None of the above

28. If the stock price goes up to $185, would you get a margin call? *

A) Yes, because the Maintenance Margin at P = $185 is lower than the given MM 30%

B) No, because the Maintenance Margin at P = $185 is higher than the given MM = 30%

C) No, because the price at which I will receive a margin call should be $188.57 or higher

D) B & C

E) None of the above

29. What is your return if the stock price after 1 year is $125? *

A) 62.5%

B) 38.46%

C) (38.46%)

D) None of the above

30. If the Stock is paying a dividend of $4 per share, what is your rate of return if the stock price after 1 year is

$170?*

OA) (9.61%)

B) (13.4%)

C) 13.4%

D) None of the above

Answer & Explanation Solved by verified expert
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: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students