Dee Trader opens a brokerage account and purchases 200 shares of Internet Dreams at $48 per share. She borrows $3,100 from her broker to help pay for the purchase. The interest rate on the loan is 5%.
a. What is the margin in Dee’s account when she first purchases the stock? Margin $?
b-1. If the share price falls to $38 per share by the end of the year, what is the remaining margin in her account? (Round your answer to 2 decimal places.) Remaining margin ?
b-2. If the maintenance margin requirement is 30%, will she receive a margin call? Yes or No?
c. What is the rate of return on her investment? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.) Rate of return ?