Answer:
The price at which a margin call would be received is $28.929.
Explanation:
The stated question does not contain complete information. The remaining information is as follows.
<em>Assume that you purchase 150 shares of RossCorp stock at $45 each by making a margin deposit of 55 percent. At what price would you receive a margin call?</em>
The price is calculated using the formula for maintenance margin as follows.
Maintenance margin = Equity in account / Value of stock
Equity in account = (Shares purchased x Call price) - (Shares purchased x Remaining ratio x Sale price)
Equity in account = (150 x P) - (150 x 0.45 x 45)
= 150P - 3037.5
Value of stock = Shares purchased x Call price
= 150P
Inserting these values into the formula for maintenance margin:
0.3 = (150P - 3037.5) / 150P
45P = 150P - 3037.5
105P = 3037.5
P = 28.929
Hence, the price at which a margin call would be received is $28.929.
Answer:
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Explanation:
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Given that: F (Future worth) = $2,500, i (nominal interest rate)
= 0.12, compounded monthly = 12 months, years of investment = 1 year, and no.
of employees = 20. Compute using the annuity formula: A=Fi/(((1+i)^n)-1).
Calculating i = 0.12/12 = 0.01, since it is compounded monthly. Calculating n
(total number of compounding) = 1 x 12 = 12, since year of investment is equal
to 1. Substituting F=2500, i=0.01 and n=12 to the annuity formula, you will get
A=$197.12. Multiply by 20, you will get $3,942.44.
