Shake venture wants to purchase 1000 shares of an internet, Ask an Expert

Management Studies

Shake Venture wants to purchase 1,000 shares of an internet technology stock for $15 a share. She figures that she needs $15,000 plus $90 brokerage commission to purchase the stock. She currently has $8,000 of liquidity in her money market account.

A. What can Shakee borrow on margin in order to make the transaction?

B. If the stock jumps to $50 per share within a week, how much will Shakee realize in profit after paying her broker.

C. If the stock dropped to $5 per share, rather than increasing to $50, and the broker put in the margin call, how much must Shakee pay the broker.

D. Base on the beginning account balance of $8,000 what is Shakee's loss?

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Business Management, Management Studies

Category:- Business Management
Reference No.:- M9169818

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