Dée Trader opens a brokerage account and purchases 300 shares of Internet Dreams at $34 per share. She borrows $4,400 from her broker to help pay for the purchase. The interest rate on the loan is 7%.
a. What is the margin in Dée’s account when she first purchases the stock? Margin
b. If the share price falls to $24 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
c. If the maintenance margin requirement is 30%, will she receive a margin call?
O Yes
O No
d. 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
