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Vanyuwa [196]
2 years ago
5

Old Economy Traders opened an account to short-sell 1,900 shares of Internet Dreams at $58 per share. The initial margin require

ment was 50%. (The margin account pays no interest.) A year later, the price of Internet Dreams has risen from $58 to $60, and the stock has paid a dividend of $3.50 per share. a. What is the remaining margin in the account
Business
1 answer:
a_sh-v [17]2 years ago
7 0

Answer:

45.67%

Explanation:

Calculation to determine the remaining margin in the account

First step is to calculate the 1 year price

1 year price=1900 shares*$58 per share

1 year price = $110,200

Second step is to calculate the Equity

Margin requirement is 50% so equity = 50%*$110,200

Margin requirement is 50% so equity =$55,100

Third step is to calculate the 1 year later price increase of 60

1 year later price increase to 60

$1900 shares*$60 per share =114,000

Fourth step is to calculate the Dividend

Dividend =$3.50 *1900

Dividend=$6,650

Now let calculate the Margin

Margin = $55,100/($114,000+$6,650)

Margin =$55,100/$120,650

Margin= 45.67%

Therefore the remaining margin in the account is 45.67%

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A cost that cannot be avoided or changed because it arises from a past decision, and is irrelevant to future decisions, is calle
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Answer:

e. Sunk cost.

Explanation:

As per the given statement, the best appropriate option is sunk cost. As the sunk cost deals with the past cost which is already incurred in the past and it cannot be changed or avoided, neither it can be recovered. Example - Rent expense.

Plus it does not affect the future decisions that means it is irrelevant for decision-making aspects.

6 0
3 years ago
During a certain year, the nominal interest rate was 7 percent, the real interest rate was 4 percent, and the CPI was 198.3 at t
Dima020 [189]

Answer:

CPI at the beginning of the year = 192.52

Explanation:

given data

nominal interest rate = 7 percent

real interest rate = 4 percent

CPI = 198.3

to find out

CPI at the beginning of the year

solution

we know that according to fisher equation

1 + r = \frac{1+n}{1+i}    ....................1

and for smaller values is equivalent to r

r = n - i           .....................2

here r is real interest rate and n is nominal interest rate and i is inflation rate

so from equation 2

4 = 7 - inflation rate

inflation rate = 3 percent

so

Rate of inflation = (CPI at the end of the year - CPI at the beginning of the year) × 100 ÷ CPI at the beginning of the year

put here value

3% = (198.3 - CPI at the beginning of the year) × 100 ÷  CPI at the beginning of the year

CPI at the beginning of the year = \frac{19830}{103}

CPI at the beginning of the year = 192.52

7 0
2 years ago
Refer to the accompanying national income statistics (in billions of dollars). Personal income is Multiple Choice $317 billion.
Elden [556K]

Unclear question. I provided some information on national income statistics.

<u>Explanation:</u>

The national income statistics is an economic indicator that tells us the value of goods and services (as in this case in billion of dollars) produced by a country's economy.

Information about the national income statistics of a country is usually published by the World Bank; an internal financial institution.

7 0
2 years ago
I am considering buying a new sports car like a Ford Mustang. Another sports car that would not likely compete head-to-head like
AURORKA [14]

Answer:

Brand Competition

Explanation:

Brand Competition arises when two or more different companies offer a similar product, under a different brand. The products are similar, but not fully substitutes: they can be distinguished in some way: quality, features, price, and so on.

In this case, what makes the Ford Mustang and the Audi R8 is the price. The Ford brand is significantly cheaper than the Audi brand, which might give Ford the upper hand in market share. However, this is not always the case because the Audi car could have the upper hand when it comes to quality, and obtain more marke share because of that.

5 0
3 years ago
Use the information below for Harding Company to answer the question that follow. Harding Company Accounts payable $28,638 Accou
inn [45]

Answer:

$119,159

Explanation:

The computation of the quick asset is shown below:

Quick assets = Cash + Marketable securities  + Accounts receivable

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                     = $119,159

Only these items i.e cash, marketable securities and the account receivable are shown in the quick assets

4 0
3 years ago
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