A customer has a long margin account with no SMA. if the market value of the securities rises, sma will increase by 50% of the increase in market value.
SMA balances are increased in value by cash deposits in brokerage accounts. The SMA also retains interest and dividend payments from long positions and earnings from closing security positions. Clients can use SMA funds to purchase additional securities for their margin accounts.
The SMA of long-margin accounts decreases when the market value decreases. The long account's SMA volume only decreases as it is used and is not affected by market value declines.
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Answer: a. Issuer
Explanation:
When bonds trade at a premium, it means that the yield has fallen below the coupon rate which means that interest rates have dropped. Companies can take advantage of this to reissue new bonds at the lower interest rate so that they can save on costs.
Bonds usually have a call provision which would enable the issuer to call the bond in and pay the holder at the par value plus interest repayments at the lower yield which they will do in this case. They will then reissue new bonds at a lower rate.
Answer: $36,700
Explanation:
Given that,
Wages = $41,000
Interest income = $700
Jason and Mary’s deductions = $5,000
Itemized deductions = $14,000
Adjusted gross income = Wages + Interest income - Jason and Mary’s deductions
= $41,000 + $700 - $5,000
= $36,700
The correct question is:
Analysts who follow Howe Industries recently noted that, relative to the previous year, the company's net cash provided from operations increased, yet cash as reported on the balance sheet decreased. Which of the following factors could explain this situation?
Select one:
a. The company cut its dividend.
b. The company made large investments in fixed assets.
c. The company sold a division and received cash in return.
d. The company issued new common stock.
e. The company issued new long-term debt.
Answer:
b. The company made large investments in fixed assets.
Explanation:
The operating cash if invested in fixed assets will increase cash flow in the business. Since the cash is not used in production within that period (was invested in long term asset), it will not be represented as cash flow for this period. So reported cash will be low.
Companies invest in long term assets that will produce returns in to future, so cash flow from this investment will appear at a future date.