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Dée Trader opens a brokerage account and purchases 400 shares of Internet Dreams at $30 per share. She borrows $5,000 from her broker to help pay for the purchase. The interest rate on the loan is 5%.

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

Margin [ ] $

b-1. If the share price falls to $19 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?

Yes
No

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 [ ] %

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Jean Keeling
Jean KeelingLv2
28 Sep 2019

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