Problem#1 $

a)(i) Total number of share 40000

per share price 80
Number of shares you could purchase 500
later if stock is sold on 100
then total shres proceed will be 50000
rate of return 0.25
Rate of return in percentage 25

a)(ii) later if stock is sold on 40

then total shres proceed will be 20000
rate of return -0.5
Rate of return in percentage -50

b) initial margin requirement in percent 60

1/percentage margin requirement 0.01666666666667
rate of return on the stock if it is later sold at $100 a share 41.6666666666667
rate of return on the stock if it is sold for $40 a share -83.333333333333

Problem#2

a) margin in percent 40%

total deposit amount $50,000
how many shares we could purchase 125000
per share price $35
Lauren can purchase shares 3571.42857142857

b)(i) If stock rises to shares $45

Lauren’s total return is 160714.285714286
Total profit 35714.2857142857
If stock falls to $25
Lauren’s total return is 89285.7142857143
Total loss -35714.285714286

c) Initial Loan Value 75000

if maintenance margin 30%
margin $30
 Problem#5

a) total shares $200

per share price $25
sale price $40
now sale price $45
with this profit resulting from the sale of the 200 shares at $40 i am satisfied.

b) with the stop loss 60

if share price decrease $30
Without the stop loss 20

Problem#6

a) Two years ago shares purchase 300

per share price $30
currently per share price $45
market value 13500
debit balance 9000
rate of return 0.5
rate of return in percentage 50

b) if margin requirement is 60%

1/margin requirement 1.66666666666667
rate of return on the stock if later sold at $45 a share 83.3333333333333

Problem#7

per share selling price $28

Limit order $24
When market declined to $20
limit order was $24 (buy), then the price went to $36
Rate of return 50

Assuming market order $28

Rate of return 28.5714285714286

Limit order $18

the market did not decline to $18 Our lowest price was of $20 so,limit order was never executed
imit order was never executed