Exam 2: The Investment Process

You recently purchased 200 shares of stock at a cost per share of $23.50. The initial margin requirement on this stock is 75% and the maintenance margin is 50%. The stock is currently valued at $25.00 a share. What is your current margin position? Ignore margin interest.

(Multiple Choice)

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Question 81

Stephen is purchasing 1,000 shares of KPT, Inc., stock at a price per share of $18.60. What is the minimum amount the Federal Reserve will require Stephen to pay in cash for this purchase?

(Multiple Choice)

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Question 82

Suzette recently purchased 300 shares of Nu Electronics stock for $4.40 a share. Her broker required a cash payment of $1,320, plus trading costs, for the purchase. What is the initial margin requirement on this stock?

(Multiple Choice)

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Question 83

Theresa has a margin account with a 70% initial margin requirement and a 35% maintenance margin. What is the maximum dollar amount of stock she can purchase if her cash balance in the account is $27,000?

(Multiple Choice)

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Question 84

You purchased 1,000 shares of stock at $35 a share. The stock is currently selling for $39 a share. The initial margin was 70% and the maintenance margin is 30%. What is your current margin position?

(Multiple Choice)

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Question 85

You currently have $5,000 in cash in your brokerage account. You decide to spend $8,000 to purchase shares of stock and borrow $3,000 from your broker to do so. Which type of brokerage account do you have?

(Multiple Choice)

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Question 86

Nelson purchased 1,600 shares of stock for $18.75 a share. The initial margin requirement is 70% and the maintenance margin is 40%. What is the maximum percent by which the stock price can decline before he receives a margin call?

(Multiple Choice)

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Question 87

Neshoba Industries stock is selling for $33 a share. You would like to purchase as many shares of this stock as you can. Your margin account currently has available cash of $7,000 and the initial margin requirement is 65%. What is the maximum number of shares you can buy?

(Multiple Choice)

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Question 88

You purchased 400 shares of stock for $28.50 a share. The initial margin requirement is 60% and the maintenance margin is 30%. What is the maximum percentage decrease that can occur in the stock price before you receive a margin call?

(Multiple Choice)

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Question 89

The minimum equity that must be maintained at all times in a margin account is called the:

(Multiple Choice)

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Question 90

Mary purchased 100 shares of Best Foods stock on margin at a price of $37 a share. The initial margin requirement is 60% and the maintenance margin is 35%. What is the lowest the stock price can go before Mary receives a margin call?

(Multiple Choice)

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Question 91

What is the maximum loss you can incur if you have a long position on a stock in a cash account?

(Multiple Choice)

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Question 92

A stock was purchased for $45 a share and sold ten months later for $48 a share. If the shares were purchased totally with cash the holding period return would be % as compared to % if the purchase was made using 70% margin. Ignore trading costs and margin interest.

(Multiple Choice)

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Question 93

Three months ago, Trevor purchased 500 shares of stock at a cost per share of $64.20. The purchase was made on margin with an initial margin requirement of 65%. Trevor pays 1.6% over the call money rate of 4.8%. What will his total dollar return be on this investment if he sells his shares today at a price per share of $63.40? Ignore dividends.

(Multiple Choice)

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Question 94

Maddie recently short sold 400 shares of common stock for $25 a share. Her initial margin requirement was 70% and the maintenance margin is 35%. The stock is currently trading at $22.22 a share. What is her current short position in this stock?

(Multiple Choice)

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Question 95

Last week, you sold 800 shares of Ace stock for $24,000. The sale was a short sale with an initial margin requirement of 70%. The maintenance margin is 40%. Some positive news concerning the company was released last night and the stock price jumped this morning to $35 a share. What is your current margin position in this stock?

(Multiple Choice)

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Question 96

A discretionary account:

(Multiple Choice)

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Question 97

Marcia purchased 100 shares of Hyde Foods stock on margin at a price of $35 a share. The initial margin requirement is 65% and the maintenance margin is 35%. What is the lowest the stock price can go before Marcia receives a margin call?

(Multiple Choice)

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(82)

Question 98

John just used $15,000 of cash plus a $6,000 margin loan to purchase $21,000 worth of Walmart (WMT)stock. This is the only transaction he has made in this account. What is his current account margin?

(Multiple Choice)

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Question 99

Elizabeth short sold 500 shares of stock at $25 a share. One month later, she covered the short at a price of $22. What was her total dollar return on this investment?

(Multiple Choice)

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Question 100

Showing 81 - 100 of 104

You recently purchased 200 shares of stock at a cost per share of $23.50. The initial margin requirement on this stock is 75% and the maintenance margin is 50%. The stock is currently valued at $25.00 a share. What is your current margin position? Ignore margin interest.

Stephen is purchasing 1,000 shares of KPT, Inc., stock at a price per share of $18.60. What is the minimum amount the Federal Reserve will require Stephen to pay in cash for this purchase?

Suzette recently purchased 300 shares of Nu Electronics stock for $4.40 a share. Her broker required a cash payment of $1,320, plus trading costs, for the purchase. What is the initial margin requirement on this stock?

Theresa has a margin account with a 70% initial margin requirement and a 35% maintenance margin. What is the maximum dollar amount of stock she can purchase if her cash balance in the account is $27,000?

You purchased 1,000 shares of stock at $35 a share. The stock is currently selling for $39 a share. The initial margin was 70% and the maintenance margin is 30%. What is your current margin position?

You currently have $5,000 in cash in your brokerage account. You decide to spend $8,000 to purchase shares of stock and borrow $3,000 from your broker to do so. Which type of brokerage account do you have?

Nelson purchased 1,600 shares of stock for $18.75 a share. The initial margin requirement is 70% and the maintenance margin is 40%. What is the maximum percent by which the stock price can decline before he receives a margin call?

Neshoba Industries stock is selling for $33 a share. You would like to purchase as many shares of this stock as you can. Your margin account currently has available cash of $7,000 and the initial margin requirement is 65%. What is the maximum number of shares you can buy?

You purchased 400 shares of stock for $28.50 a share. The initial margin requirement is 60% and the maintenance margin is 30%. What is the maximum percentage decrease that can occur in the stock price before you receive a margin call?

The minimum equity that must be maintained at all times in a margin account is called the:

Mary purchased 100 shares of Best Foods stock on margin at a price of $37 a share. The initial margin requirement is 60% and the maintenance margin is 35%. What is the lowest the stock price can go before Mary receives a margin call?

What is the maximum loss you can incur if you have a long position on a stock in a cash account?

A stock was purchased for $45 a share and sold ten months later for $48 a share. If the shares were purchased totally with cash the holding period return would be % as compared to % if the purchase was made using 70% margin. Ignore trading costs and margin interest.

Maddie recently short sold 400 shares of common stock for $25 a share. Her initial margin requirement was 70% and the maintenance margin is 35%. The stock is currently trading at $22.22 a share. What is her current short position in this stock?

A discretionary account:

Marcia purchased 100 shares of Hyde Foods stock on margin at a price of $35 a share. The initial margin requirement is 65% and the maintenance margin is 35%. What is the lowest the stock price can go before Marcia receives a margin call?

John just used $15,000 of cash plus a $6,000 margin loan to purchase $21,000 worth of Walmart (WMT)stock. This is the only transaction he has made in this account. What is his current account margin?

Elizabeth short sold 500 shares of stock at $25 a share. One month later, she covered the short at a price of $22. What was her total dollar return on this investment?

A Brief History of Risk and Return

Overview of Security Tips

Mutual Funds and Other Investment Companies

The Stock Market

Common Stock Valuation

Stock Price Behavior and Market Efficiency

Behavioral Finance and the Psychology of Investing

Interest Rates

Bond Prices and Yields

Diversification and Risky Asset Allocation

Return, Risk, and the Security Market Line

Performance Evaluation and Risk Management

Futures Contracts

Stock Options

Option Valuation

Alternative Investments

Corporate and Government Bonds

Projecting Cash Flow and Earnings

Global Economic Activity and Industry Analysis

Mortgage-Backed Securities

Filters

Exam 2: The Investment Process

You recently purchased 200 shares of stock at a cost per share of $23.50. The initial margin requirement on this stock is 75% and the maintenance margin is 50%. The stock is currently valued at $25.00 a share. What is your current margin position? Ignore margin interest.

Stephen is purchasing 1,000 shares of KPT, Inc., stock at a price per share of $18.60. What is the minimum amount the Federal Reserve will require Stephen to pay in cash for this purchase?

Suzette recently purchased 300 shares of Nu Electronics stock for $4.40 a share. Her broker required a cash payment of $1,320, plus trading costs, for the purchase. What is the initial margin requirement on this stock?

Theresa has a margin account with a 70% initial margin requirement and a 35% maintenance margin. What is the maximum dollar amount of stock she can purchase if her cash balance in the account is $27,000?

You purchased 1,000 shares of stock at $35 a share. The stock is currently selling for $39 a share. The initial margin was 70% and the maintenance margin is 30%. What is your current margin position?

You currently have $5,000 in cash in your brokerage account. You decide to spend $8,000 to purchase shares of stock and borrow $3,000 from your broker to do so. Which type of brokerage account do you have?

Nelson purchased 1,600 shares of stock for $18.75 a share. The initial margin requirement is 70% and the maintenance margin is 40%. What is the maximum percent by which the stock price can decline before he receives a margin call?

Neshoba Industries stock is selling for $33 a share. You would like to purchase as many shares of this stock as you can. Your margin account currently has available cash of $7,000 and the initial margin requirement is 65%. What is the maximum number of shares you can buy?

You purchased 400 shares of stock for $28.50 a share. The initial margin requirement is 60% and the maintenance margin is 30%. What is the maximum percentage decrease that can occur in the stock price before you receive a margin call?

The minimum equity that must be maintained at all times in a margin account is called the:

Mary purchased 100 shares of Best Foods stock on margin at a price of $37 a share. The initial margin requirement is 60% and the maintenance margin is 35%. What is the lowest the stock price can go before Mary receives a margin call?

What is the maximum loss you can incur if you have a long position on a stock in a cash account?

A stock was purchased for $45 a share and sold ten months later for $48 a share. If the shares were purchased totally with cash the holding period return would be ________% as compared to ________% if the purchase was made using 70% margin. Ignore trading costs and margin interest.

Maddie recently short sold 400 shares of common stock for $25 a share. Her initial margin requirement was 70% and the maintenance margin is 35%. The stock is currently trading at $22.22 a share. What is her current short position in this stock?

A discretionary account:

Marcia purchased 100 shares of Hyde Foods stock on margin at a price of $35 a share. The initial margin requirement is 65% and the maintenance margin is 35%. What is the lowest the stock price can go before Marcia receives a margin call?

John just used $15,000 of cash plus a $6,000 margin loan to purchase $21,000 worth of Walmart (WMT)stock. This is the only transaction he has made in this account. What is his current account margin?

Elizabeth short sold 500 shares of stock at $25 a share. One month later, she covered the short at a price of $22. What was her total dollar return on this investment?

A Brief History of Risk and Return

Overview of Security Tips

Mutual Funds and Other Investment Companies

The Stock Market

Common Stock Valuation

Stock Price Behavior and Market Efficiency

Behavioral Finance and the Psychology of Investing

Interest Rates

Bond Prices and Yields

Diversification and Risky Asset Allocation

Return, Risk, and the Security Market Line

Performance Evaluation and Risk Management

Futures Contracts

Stock Options

Option Valuation

Alternative Investments

Corporate and Government Bonds

Projecting Cash Flow and Earnings

Global Economic Activity and Industry Analysis

Mortgage-Backed Securities

Filters

A stock was purchased for $45 a share and sold ten months later for $48 a share. If the shares were purchased totally with cash the holding period return would be % as compared to % if the purchase was made using 70% margin. Ignore trading costs and margin interest.