Margin Questions Essay

1. Assume that an investor buys 100shares of stock at RM 50.00, putt up a 60% allowance account.a. What is the debit balance in this proceeding?b. How overmuch equity capital must the investor s new permissiveness blank space2. Assume that an investor buys 100 shares of stock at RM 50.00 per share, putting up a 70% margin. a. What is the debit balance in this act? b. How much equity funds must the investor provide to make this margin transaction? c. If the stock rises to RM 80.00 per share, what is the investor margin position?3. Miguel Torres purchased 100 shares of Cant Win.com for RM50 per share, development as little of his own money as he could. His component has a 50% initial margin requirement. The impairment of the stock waterfall to RM30 per share. What does Miguel need to do?4. An investor buys 200 shares of stock selling at $ 80 per share using a margin of 60%. The stock pays yearly dividends $ 1 per share. A margin loan can be obtained at an annual interest cost of 8%. Determine what return on invested capital the investor will realize if the price of the stock increases to $ 104 within sixsome months. What is the annualized rate of return on this transaction?5. Ah Beng purchased 3000 shares of Digi Communications Bhd. stock at RM 4.60 per share using the prevailing minimum initial margin of 65%. He held the stock for exactly 4 month and sold it without all brokerage cost at the end of the period. During the four month dimension period, the stock paid RM 0.40 per share in cash dividends. Ah Beng was charged 6% annually interest on margin loan. The minimum maintenance margin was 40%.a. Calculate the initial value of the transaction, the debit balance, and the equity position on Ah Bengs transaction. b. For each share prices stated below, take care the veridical margin percentage and indicate whether Ah Beng account would have excess equity, or would be subject to margin call?I. RM 4.00II. RM 5.50III. RM 6.50IV. RM 3.30V. RM 4.55c. Calcu late theI. Amount of dividend original during the 4 months holding period II. Amount of interest received during the 4 months holding period d. Use each of the following sale price at the end of 4 month holding period to calculate Ah Beng HPR return on Digi Communication Bhd. share transaction.I. RM 5.00II. RM 7.00III. RM 4.80