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NeTakaya
3 years ago
12

Allan purchased 800 shares of stock on margin for $31 a share and sold the shares five months later for $33.50 a share. the init

ial margin requirement was 65 percent and the maintenance margin was 30 percent. the interest rate on the margin loan was 7.5 percent. he received no dividend income. what was his holding period return?
Business
1 answer:
quester [9]3 years ago
5 0

Answer:

Holding period return = 4.94%

Explanation:

Given that :

Allan purchased 800 shares of stock on margin for $31

And He sold it at the rate of $33.50 after five months.

Initial Margin requirement = 65%

Maintenance Margin = 30%

Interest Rate on Margin loan = 7.5%

The Holding period return can therefore be calculated by the formula:

Holding period return =  (sale price - purchase price - interest paid )/Purchase price

where ;

31 × 800 = 24800

Interest for five month = 5/12

Holding period return = (33.50-31)×800 - (7.5% ×24800× 5/12) / 24800

Holding period return = (2000-775)/24800

Holding period return = 0.0494

Holding period return = 4.94%

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2 years ago
A small construction company has $110,000 set aside in a capital improvement fund to purchase new equipment. If $18,000 is inves
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Answer:

21.26%

Explanation:

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3 years ago
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3 years ago
Read 2 more answers
On january 2, fafnir co. purchased a franchise with a finite useful life of 10 years for $50,000. an additional franchise fee of
skelet666 [1.2K]

The amount should Fafnir report as intangible asset - franchise is -

Purchase value of Franchise = $ 50,000

Life of Franchise = 10 years

Salvage value = $ 0 ( not given)

Since, no other methods of amortization are specifically mentioned, straight line method will be used.

Book value of Franchise = Purchase price - Amortization expenses

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7 0
3 years ago
Which of the following is not allowed by scrum refactoring velocity tracking relaease planning hardening sprints
Igoryamba

Answer:

(B) Hardening sprints

Explanation:

Hardening Sprints are not allowed because the subject of hardening should be continuously address throughout normal Sprints.

Or if the question has the following options:

Which of the following is not allowed in Scrum?

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3 years ago
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