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Dée Trader opens a brokerage account and purchases 400 shares of Internet Dreams at $24 per share

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Dée Trader opens a brokerage account and purchases 400 shares of Internet Dreams at $24 per share. She borrows $3,400 from her broker to help pay for the purchase. The interest rate on the loan is 9%.

Required:
a. What is the margin in Dée’s account when she first purchases the stock?

 

 

b. If the share price falls to $14 per share by the end of the year, what is the remaining margin in her account?

 

 

c. If the maintenance margin requirement is 30%, will she receive a margin call?

multiple choice

• Yes

• 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.)