Your client wants to purchase stock on margin. You assess the client and the stock and...

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Finance

Your client wants to purchase stock on margin. You assess theclient and the stock and decide that a 40% margin is appropriate.Commissions are 1% and the rate of interest on margin loans is 8%.The current price of the stock is $100/share and your client wantsto purchase 1,000 shares.
a. How much cash must your client put into the acc ount tosupport the initial purchase?
b. Below what price would the price of the stock have to dropfor there tois a margin call witha maintenance margin of 30%?
c. What is the profit or loss on this transaction if the clientsells the stock 6 months later for $80 a share?
d. What is the profit or loss on this transaction if the clientsells the stock 6 months later for $120 a share?

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Your client wants to purchase stock on margin. You assess theclient and the stock and decide that a 40% margin is appropriate.Commissions are 1% and the rate of interest on margin loans is 8%.The current price of the stock is $100/share and your client wantsto purchase 1,000 shares.a. How much cash must your client put into the acc ount tosupport the initial purchase?b. Below what price would the price of the stock have to dropfor there tois a margin call witha maintenance margin of 30%?c. What is the profit or loss on this transaction if the clientsells the stock 6 months later for $80 a share?d. What is the profit or loss on this transaction if the clientsells the stock 6 months later for $120 a share?