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Rama09 [41]
2 years ago
13

A customer opens a margin account by purchasing 100 shares of ABC at $60 per share, depositing the 50% Regulation T requirement.

The stock rises to $80 per share on the next day and then falls to $60 per share on the day after. The account will now show:
Business
1 answer:
Scilla [17]2 years ago
5 0

Answer:

Account Balance in margin account:

Investment = $6,000 (100 x $60)

The customer's account will first increase with an unrealized gain of $2,000 ($80 - 60 x 100) on the next day.  It will then decrease with an unrealized loss of $2,000 ($80 - 60 x 100) on the day after.  This cancels the earlier unrealized gain.

Explanation:

The customer's investment will now show a balance of $6,000 with a contra account showing a debt of $3,000 for the balance of the Regulation T margin account.  According to investopedia, "A margin account is a brokerage account in which the broker lends the customer cash to purchase stocks or other financial products.  The loan in the account is collateralized by the securities purchased and cash, and comes with a periodic interest rate."

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Longley Trucking is issuing a 20-year bond with a $2,000 face value tomorrow. The issue is to pay an 8% coupon rate, because tha
Katen [24]

Answer:

Longly will receive $1,817.43 from selling the bond.

Explanation:

As the coupon rate is 8%; we have annual coupon payment = 2,000 x 8% = $160.

The price of the bond Longly will receive is equal to the present value of 20 annual coupon payment plus the present value of $2,000 face value repayment in 20 years time; with the two streams of cash flow discounting at the market rate at the date of issuing 9%; which is calculated as:

[ ( 160/9%) x [ 1 - 1.09^(-20) ] ] + ( 2,000 / 1.09^20 ) = $1,817.43.

So, the answer is $1,817.43.

7 0
3 years ago
During a period of economic expansion, when expected profitability is high, the: select one: a. Equilibrium price of bonds incre
spin [16.1K]

During a period of economic expansion, the demand curve for bonds shifts to the left.

<h3>What is the effect of an economic expansion?</h3>

During an economic expansion, the supply of money in the economy rises and the demand for money also increases. This leads to an increase in the interest rate and the price of the bonds would fall.

If expected profitability is expected to be high, people would prefer to hold more risky investment. Thus, there would be a fall in the demand for bonds. The demand curve for bonds would shift to the left.

Here are the options to this question:

A) the demand curve for bonds shifts to the left.

B) the supply curve of bonds shifts to the right.

C) the equilibrium interest rate falls.

D) the equilibrium price of bonds rises.

To learn more about economic expansion, please check: brainly.com/question/831569

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4 0
2 years ago
Compute the Work-in-Process transferred to the finished goods warehouse on April 30 using the following information:
malfutka [58]

Answer:

$1,100

Explanation:

Computation for the Work-in-Process transferred to the finished goods warehouse on April 30

Work-In-Process Inventory, April 1 300

Direct materials used in production 225

Direct labor costs incurred 400

Manufacturing overhead costs 350

Less Work-In-Process Inventory, April 30 ($175)

Work-in-Process transferred to the finished goods warehouse $1,100

Therefore the Work-in-Process transferred to the finished goods warehouse on April 30 will be $1,100

4 0
3 years ago
In 2013, the market price for a 3,000 square foot home in south tampa, florida was $350,000 and 358 new homes were built. in 201
vivado [14]
Answer would be .24, according to my "calculations"
7 0
3 years ago
Suppose that an issuing bank pays on documents that are conforming to the requirements of the letter of credit, but the seller h
AleksAgata [21]

Answer:

a) As long as the documents strictly comply with the letter of credit requirements, the bank will not have to reimburse the buyer

Explanation:

A letter of credit refers to the letter in which the bank is made a guarantee to pay the amount to a particular person by compiling the specific conditions during the exporting of goods

Since in the question, it is given that the seller has shipped the goods that are worthless i.e of no use for the buyer so in this case,  the bank would not reimburse the buyer.

Therefore the correct option is A.

6 0
3 years ago
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