Dee Trader opens a brokerage account and purchases 100 shares of Internet Dreams at $56 per share. She borrows $3,500 from her broker to help pay for the purchase. The interest rate on the loan is 9%.
a. What is the margin in Dee’s account when she first purchases the stock?
Margin $
b-1. If the share price falls to $46 per share by the end of the year, what is the remaining margin in her account? (Round your answer to 2 decimal places.)
Remaining margin %
b-2. If the maintenance margin requirement is 30%, will she receive a margin call?
No
Yes
c. What is the rate of return on her investment? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)
Rate of return %