Calculate the return on investment, when the stock price drops to $20 a share.
Your answer: A was correct!
Proceeds from sale = 400×$25 = $10,000
Initial margin requirement = $10,000 ×50% = $5,000
Total funds in account = $10,000 + $5,000 = $15,000
Total value of securities (TV) = 400 ×20 = $8,000
Equity = total funds －dollars needed to buy back shares = 15,000 －8,000 = $7,000
Profit = 7,000 －5,000 = $2,000
Return = 1,800 / 5,000 = 36% | 
发表于 2006-4-17 10:51
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