A the current market price for xyz is 52 per share initial, Ask an Expert

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A. The current market price for XYZ is $52 per share. Initial margin is 50%, maintenance margin is 35% and margin interest is 1.75% per year.

A.1) You believe the stock price will increase over the next year and wish to trade exactly one round lot. What trade should you make? How much margin would you have to post to your account? At what price would you receive a margin call?

A.2) Suppose you are correct and the stock rises to $55 per share at the end of the year. What is your percentage return on equity for this trade?

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91673715

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