1. You just purchased 1,000 shares of WMT stock at $40 per share. What would your rate of return be if after 1 year the stock price increases to $45 and your initial percentage margin was .40?
a. 33%
b. 32.3%
c. 31.25%
d. 30.28%
2. You have just purchased 100 shares of Ford Motor at $50 per share on margin. The initial margin requirement is 50 percent. If the maintenance margin is 40 percent, how far could the stock price fall before you would get a margin call?
a. $41.67
b. $40.10
c. $36.34
d. $38.90