1 you purchased 1000 shares of csco common stock on margin, Ask an Expert

Finance

1. You purchased 1000 shares of CSCO common stock on margin at $19 per share. Assume the initial margin is 50%, and the maintenance margin is 30%. Below what stock price level would you get a margin call? Assume the stock pays no dividend; ignore interest on margin.

a. $12.86

b. $15.75

c. $19.67

d. $13.57

2. U.S Treasury bills are paying about 0.2 percent, and the estimated market risk premium (based on large common stocks) is about 8 percent. Apple (AAPL) has an estimated beta of 1.44. Using the SML approach, what's the return on equity of Apple stock?

A. 11.72%

B. 11.32%

C. 11 %

D. 10.32 %

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Financial Management, Finance

Category:- Financial Management
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