The next four questions deal with the same overall data. The first part of the question will repeat the original parameters of the problem. The second part of the question will have the new information that you have to solve for. Assume I purchase 200 shares of stock, each selling for $90. I have borrowed $8000 from my broker, and have paid for the remainder of the stock out of my own savings account.
What is the margin in my account when I first purchase the stock?
If the stock price falls to $75, what is the margin in my account?
If my broker's margin requirement is 40% maintenance margin, when will I receive a margin call?
If the year-end stock price is $100 and I also received a $4.00 dividend per share, what is my ROI (Return on Investment) for the year? (assume you paid a 6% margin interest rate on your margin loan)