1) Matt short sold 600 shares of stock at $10.50 a share. The initial margin is 80 percent and the maintenance margin is 50 percent. The stock is currently selling for $6.80 a share. What is Matt's account equity at this time? Ignore margin interest.
2) Exactly 8 months ago, Fhloston Corp. common stock was selling for $23.98 per share. Today, shares on the market trade for $27.39 per share. If you bought the stock 8 ago, what would your effective annual return on the stock be? Submit your final answer as a percentage rounded to two decimal places
3) One year ago, you bought 5,000 shares of Katinka Inc. common stock for $47.63 per share using your margin account with a 50% initial margin requirement. Your broker charges 5.1% per year on margin loans. Today, the stock is selling for $51.56 per share. What is your return if you sell all of your shares and pay off your margin loan and and interest? Submit your final answer as a percentage rounded to two decimal places
4) In 3-5 sentences, briefly explain why it is important for investors to construct an Investment Policy Statement. What should be included in the statement?
5) You currently have $34,000 in your margin account. You would like to invest in shares of Mondoshaw Inc. common stock, which is currently trading at $55.34 per share. If your margin account requires an initial margin of 50%, what is the maximum number of shares you can buy (rounded to the nearest whole number)? Ignore transaction costs.
6) Over the last five years, Dallas Multipass Inc. common stock returned -4.07%, 8.71%, 8.68%, -7.95%, and 9.52%, respectively. What is the geometric average of returns for the corporation? Submit your final answer as a percentage rounded to two decimal places
7) Derek buys 400 shares of Mugatu Corp. common stock form $43.45 per share. One year later, he sells all of his shares for $43.38 per share. During the one year period, the corporation paid out $1.73 per share in dividends. What is the total percent return over the year? Submit your final answer as a percentage rounded to two decimal places.
8) You decide that you want to buy 2,000 shares of Mangalore Corp. common stock at $26.49 per share. You will put up $38,000 of your own money and borrow the remainder on margin. What is your current margin position? Submit your answer as a percentage rounded to two decimal places