(A) An account was opened by Old Economy traders to short sell 1,000 shares of Internet dreams. The requirement of margin at the beginning accounts for 50%. The price of internet dream after 1 year increased from $40 to $50. The dividend paid by the stock per share accounts for $2 To calculate: The remaining margin in old economy account. Introduction: Margin in the trading account refer to the minimum amount of money, which the investor is required to maintain in his account in the form of margin for placing a trade order.

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Answer 1

Question

Chapter 3, Problem 7PS

Summary Introduction

(A)

An account was opened by Old Economy traders to short sell 1,000 shares of Internet dreams. The requirement of margin at the beginning accounts for 50%. The price of internet dream after 1 year increased from $40 to $50. The dividend paid by the stock per share accounts for $2

To calculate:

The remaining margin in old economy account.

Introduction:

Margin in the trading account refer to the minimum amount of money, which the investor is required to maintain in his account in the form of margin for placing a trade order.

Summary Introduction

(B)

To determine:

Whether Old economy traders will be able to receive the margin call if the requirement for margin maintenance is 30%

Introduction:

Margin call comes into picture when the investor is required to deposit additional securities or money so that the margin in the investor's account stands equivalent to the minimum margin requirement.

Summary Introduction

(C)

To calculate:

Rate of return on the investment made by Old economy traders

Introduction:

Rate of return refers to the net loss or gain ascertained out of an investment over a particular period of time. It is generally represented as percentage of the initial cost of investment.

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Old Economy Traders opened an account to short sell 1,000 shares of Internet Dreams from the previous problem. The initial margin requirement was 50%. (The margin account pays no interest.) A year later, the price of Internet Dreams has risen from $40 to $50, and the stock has paid : a dividend of $2 per share.a. What is the remaining margin in the account?b. If the maintenance margin requirement is 30%, will Old Economy receive a margin call?c. What is the rate of return on the investment?

Old Economy Traders opened an account to short sell 1,500 shares of Internet Dreams at $50 per share. The initial margin requirement was 50%. (The margin account pays no interest.) A year later, the price of Internet Dreams has risen from $50 to $65, and the stock has paid a dividend of $1.50 per share. a. What is the remaining margin in the account? (Round your answer to the nearest whole number.) Remaining margin b. If the maintenance margin requirement is 30%, will Old Economy receive a margin call? Yes O No c. What is the rate of return on the investment? (Round your answer to 2 decimal places. Negative value should be indicated by a minus sign.) Rate of return %

Rob Thomas Traders opened an account to short-sell 1,000 shares of WeWork at $60. The initial margin requirement was 50%. (The margin account pays no interest.) A year later, the price of WeWork has risen from $60 to $76, and the stock has paid a dividend of $2.75 per share. a. What is the remaining margin in the account? b. If the maintenance margin requirement is 35%, will Rob Thomas Traders recieve a margin call?

Answer 2

Question

Chapter 3, Problem 7PS

Summary Introduction

(A)

An account was opened by Old Economy traders to short sell 1,000 shares of Internet dreams. The requirement of margin at the beginning accounts for 50%. The price of internet dream after 1 year increased from $40 to $50. The dividend paid by the stock per share accounts for $2

To calculate:

The remaining margin in old economy account.

Introduction:

Margin in the trading account refer to the minimum amount of money, which the investor is required to maintain in his account in the form of margin for placing a trade order.

Summary Introduction

(B)

To determine:

Whether Old economy traders will be able to receive the margin call if the requirement for margin maintenance is 30%

Introduction:

Margin call comes into picture when the investor is required to deposit additional securities or money so that the margin in the investor's account stands equivalent to the minimum margin requirement.

Summary Introduction

(C)

To calculate:

Rate of return on the investment made by Old economy traders

Introduction:

Rate of return refers to the net loss or gain ascertained out of an investment over a particular period of time. It is generally represented as percentage of the initial cost of investment.

Expert Solution & Answer

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Answer 3

Question

Chapter 3, Problem 7PS

Summary Introduction

(A)

An account was opened by Old Economy traders to short sell 1,000 shares of Internet dreams. The requirement of margin at the beginning accounts for 50%. The price of internet dream after 1 year increased from $40 to $50. The dividend paid by the stock per share accounts for $2

To calculate:

The remaining margin in old economy account.

Introduction:

Margin in the trading account refer to the minimum amount of money, which the investor is required to maintain in his account in the form of margin for placing a trade order.

Summary Introduction

(B)

To determine:

Whether Old economy traders will be able to receive the margin call if the requirement for margin maintenance is 30%

Introduction:

Margin call comes into picture when the investor is required to deposit additional securities or money so that the margin in the investor's account stands equivalent to the minimum margin requirement.

Summary Introduction

(C)

To calculate:

Rate of return on the investment made by Old economy traders

Introduction:

Rate of return refers to the net loss or gain ascertained out of an investment over a particular period of time. It is generally represented as percentage of the initial cost of investment.

Expert Solution & Answer

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Answer 4

Question

Chapter 3, Problem 7PS

Summary Introduction

(A)

An account was opened by Old Economy traders to short sell 1,000 shares of Internet dreams. The requirement of margin at the beginning accounts for 50%. The price of internet dream after 1 year increased from $40 to $50. The dividend paid by the stock per share accounts for $2

To calculate:

The remaining margin in old economy account.

Introduction:

Margin in the trading account refer to the minimum amount of money, which the investor is required to maintain in his account in the form of margin for placing a trade order.

Summary Introduction

(B)

To determine:

Whether Old economy traders will be able to receive the margin call if the requirement for margin maintenance is 30%

Introduction:

Margin call comes into picture when the investor is required to deposit additional securities or money so that the margin in the investor's account stands equivalent to the minimum margin requirement.

Summary Introduction

(C)

To calculate:

Rate of return on the investment made by Old economy traders

Introduction:

Rate of return refers to the net loss or gain ascertained out of an investment over a particular period of time. It is generally represented as percentage of the initial cost of investment.

Expert Solution & Answer

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Answer 5

Chapter 3, Problem 7PS

Summary Introduction

(A)

An account was opened by Old Economy traders to short sell 1,000 shares of Internet dreams. The requirement of margin at the beginning accounts for 50%. The price of internet dream after 1 year increased from $40 to $50. The dividend paid by the stock per share accounts for $2

To calculate:

The remaining margin in old economy account.

Introduction:

Margin in the trading account refer to the minimum amount of money, which the investor is required to maintain in his account in the form of margin for placing a trade order.

Summary Introduction

(B)

To determine:

Whether Old economy traders will be able to receive the margin call if the requirement for margin maintenance is 30%

Introduction:

Margin call comes into picture when the investor is required to deposit additional securities or money so that the margin in the investor's account stands equivalent to the minimum margin requirement.

Summary Introduction

(C)

To calculate:

Rate of return on the investment made by Old economy traders

Introduction:

Rate of return refers to the net loss or gain ascertained out of an investment over a particular period of time. It is generally represented as percentage of the initial cost of investment.

Answer 6

Chapter 3, Problem 7PS

Summary Introduction

(A)

An account was opened by Old Economy traders to short sell 1,000 shares of Internet dreams. The requirement of margin at the beginning accounts for 50%. The price of internet dream after 1 year increased from $40 to $50. The dividend paid by the stock per share accounts for $2

To calculate:

The remaining margin in old economy account.

Introduction:

Margin in the trading account refer to the minimum amount of money, which the investor is required to maintain in his account in the form of margin for placing a trade order.

Answer 7

Chapter 3, Problem 7PS

Summary Introduction

(A)

An account was opened by Old Economy traders to short sell 1,000 shares of Internet dreams. The requirement of margin at the beginning accounts for 50%. The price of internet dream after 1 year increased from $40 to $50. The dividend paid by the stock per share accounts for $2

To calculate:

The remaining margin in old economy account.

Introduction:

Margin in the trading account refer to the minimum amount of money, which the investor is required to maintain in his account in the form of margin for placing a trade order.

Answer 8

Summary Introduction

(B)

To determine:

Whether Old economy traders will be able to receive the margin call if the requirement for margin maintenance is 30%

Introduction:

Margin call comes into picture when the investor is required to deposit additional securities or money so that the margin in the investor's account stands equivalent to the minimum margin requirement.

Answer 9

Summary Introduction

(B)

To determine:

Whether Old economy traders will be able to receive the margin call if the requirement for margin maintenance is 30%

Introduction:

Margin call comes into picture when the investor is required to deposit additional securities or money so that the margin in the investor's account stands equivalent to the minimum margin requirement.

Answer 10

Summary Introduction

(C)

To calculate:

Rate of return on the investment made by Old economy traders

Introduction:

Rate of return refers to the net loss or gain ascertained out of an investment over a particular period of time. It is generally represented as percentage of the initial cost of investment.

Answer 11

Summary Introduction

(C)

To calculate:

Rate of return on the investment made by Old economy traders

Introduction:

Rate of return refers to the net loss or gain ascertained out of an investment over a particular period of time. It is generally represented as percentage of the initial cost of investment.

Answer 12

Expert Solution & Answer

Answer 13

Expert Solution & Answer

Answer 14

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Answer 15

Ch. 3 - Prob. 1PS Ch. 3 - Prob. 2PS Ch. 3 - Prob. 3PS Ch. 3 - Prob. 4PS Ch. 3 - Prob. 5PS Ch. 3 - Prob. 6PS Ch. 3 - Prob. 7PS Ch. 3 - Prob. 8PS Ch. 3 - Prob. 9PS Ch. 3 - Prob. 10PS

(C) To calculate: Rate of return on the investment made by Old economy traders Introduction: Rate of return refers to the net loss or gain ascertained out of an investment over a particular period of time. It is generally represented as percentage of the initial cost of investment.

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Chapter 3 Solutions

(C)

To calculate:

Rate of return on the investment made by Old economy traders

Introduction:

Rate of return refers to the net loss or gain ascertained out of an investment over a particular period of time. It is generally represented as percentage of the initial cost of investment.