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Klio2033 [76]
3 years ago
12

"In a new margin account, a customer buys 1,000 shares of ABC stock at $40 per share. The stock rises to $45 during the next wee

k and subsequently declines back to $40. If there are no other transactions in the account, the current SMA balance would be:"
Business
2 answers:
r-ruslan [8.4K]3 years ago
6 0

Answer:

$20,000

Explanation:

The balance of the special memorandum account (SMA) will equal half the total equity of the account. When an investor buys on the margin, he/she will invest $0.50 and the broker will invest the other $0.50.

So the investor's SMA = equity - margin requirement = $40,000 - $20,000 = $20,000

laiz [17]3 years ago
3 0

Answer: SMA Balance $40000

Explanation:

the Special Memorandum Account(SMA) Balance will remain at $40000 (1000 x $40). The SMA Balance does not decrease when the market value of the security decrease

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An employer will do a 50% match on your investment to a 401k retirement plan. If you decide to contribute a monthly amount of $2
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Answer:

There will be $92,635.42 in the account after 15 years.

Explanation:

Missing question <em>"The interest rate is fixed at 2.05%"</em>

As the employer does a 50% match on the employee’s investment, the monthly contribution to the retirement plan will be = 2 * $220 = $ 440.

The future value (F) of an annuity is given by F = (P/r)[(1+r)n-1]

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P = 440, r = 2.05/1200 and n = 15*12 = 180.

F = (440*1200/2.05)[ (1+2.05/1200)180 -1]

F = (528000/2.05)*0.359664042

F = 92635.4215493

F = $92635.42

Thus, there will be $92,635.42 in the account after 15 years.

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