TB Part 1 (1, 2, 3) 3 PDF Past Paper Questions

65) Rudolfo purchased 900 shares of stock for $62.20 a share and sold them ten months later 65) C for $64.60 a share. The initial margin requirement on this stock is 75 percent and the maintenance margin is 40 percent. Ignoring dividends and costs, what is his holding period return?...

65) Rudolfo purchased 900 shares of stock for $62.20 a share and sold them ten months later 65) C for $64.60 a share. The initial margin requirement on this stock is 75 percent and the maintenance margin is 40 percent. Ignoring dividends and costs, what is his holding period return? A) 3.86 percent B) 4.54 percent C) 5.14 percent D) 3.72 percent E) 4.95 percent 66) Mary purchased 100 shares of Best Foods stock on margin at a price of $49 a share. The 66) A initial margin requirement is 65 percent and the maintenance margin is 30 percent. What is the lowest the stock price can go before Mary receives a margin call? A) $24.50 B) $30.00 C) $33.00 D) $17.00 E) $28.00 67) You purchased 800 shares of stock for $49.20 a share. The initial margin requirement is 67) E 65 percent and the maintenance margin is 35 percent. What is the lowest the stock price can go before you receive a margin call? A) $14.54 B) $17.22 C) $9.27 D) $21.88 E) $26.49 68) Aaron purchased 300 shares of a technology stock for $16.80 a share. The initial margin 68) E requirement on this stock is 85 percent and the maintenance margin is 60 percent. What is the lowest the stock price can go before he receives a margin call? A) $4.43 B) $8.33 C) $5.55 D) $10.03 E) $6.30 69) You purchased 500 shares of stock for $28.50 a share. The initial margin requirement is 69) C 65 percent and the maintenance margin is 35 percent. What is the maximum percentage decrease that can occur in the stock price before you receive a margin call? A) 62 percent B) 57 percent C) 46 percent D) 38 percent E) 35 percent 70) Nelson purchased 1,600 shares of stock for $18.75 a share. The initial margin 70) C requirement is 70 percent and the maintenance margin is 40 percent. What is the maximum percent by which the stock price can decline before he receives a margin call? A) 45 percent B) 65 percent C) 50 percent D) 70 percent E) 30 percent 13 71) You purchase 500 shares of stock on margin at a cost per share of $22. The initial 71) D margin requirement is 60 percent. The effective interest rate on the margin loan is 6.4 percent. How much interest will you pay if you repay the loan in four months? A) $102.16 B) $68.77 C) $117.04 D) $91.93 E) $112.38 72) Sarah purchased 600 shares of Detroit Motors stock at a price of $60 a share. The initial 72) D margin requirement is 70 percent and the maintenance margin is 30 percent. The effective interest rate on the margin loan is 6.5 percent. How much margin interest will she pay if she repays the loan in seven months? A) $647.96 B) $387.29 C) $530.42 D) $404.12 E) $417.29 73) Today, you are purchasing 100 shares of stock on margin. The purchase price per share 73) E is $35. The initial margin requirement is 70 percent and the maintenance margin is 30 percent. The call money rate is 4.5 percent and you are charged 1.6 percent over that rate. What will your rate of return be if you sell your shares one year from now for $37 a share? Ignore dividends. A) 7.49 percent B) 8.03 percent C) 7.18 percent D) 6.42 percent E) 5.55 percent 74) Seven months ago, you purchased 400 shares of stock on margin. The initial margin 74) D requirement on your account is 60 percent and the maintenance margin is 30 percent. The call money rate is 4.8 percent and you pay 1.85 percent above that rate. The purchase price was $16 a share. Today, you sold these shares for $18.00 each. What is your annualized rate of return? A) 56.87 percent B) 42.77 percent C) 26.15 percent D) 33.35 percent E) 64.64 percent 75) Eight months ago, Freda purchased 500 shares of stock on margin at a price per share of 75) C $35. The initial margin requirement on her account is 70 percent and the maintenance margin is 40 percent. The call money rate is 4.75 percent and she pays 2 percent above that rate. Today, she sold these shares for $37.50 each. What is her annualized rate of return? A) 16.42 percent B) 8.50 percent C) 12.70 percent D) 14.90 percent E) 10.61 percent 14 76) Three months ago, Trevor purchased 500 shares of stock at a cost per share of $64.20. 76) A The purchase was made on margin with an initial margin requirement of 65 percent. Trevor pays 1.6 percent over the call money rate of 4.8 percent. 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. A) -$575.60 B) -$548.60 C) -$539.67 D) -$591.19 E) -$534.95 77) Robin sold 800 shares of a non-dividend paying stock this morning for a total of 77) A $29,440. She had purchased these shares on margin nine months ago at a cost per share of $35. The initial margin requirement on this stock is 60 percent and the maintenance margin is 30 percent. Robin pays 1.2 percent over the call money rate of 4.9 percent. What is her total dollar return on this investment? A) $931.41 B) $1,164.93 C) $1,440.00 D) $897.29 E) $816.48 78) You recently purchased 200 shares of stock at a cost per share of $32.50. The initial 78) B margin requirement on this stock is 75 percent and the maintenance margin is 50 percent. The stock is currently valued at $35.00 a share. What is your current margin position? Ignore margin interest. A) 73.83 percent B) 76.79 percent C) 75.69 percent D) 73.01 percent E) 74.95 percent 79) You recently purchased 1,300 shares of stock at a cost per share of $54.10. The initial 79) A margin requirement on this stock is 60 percent and the maintenance margin is 30 percent. The stock is currently valued at $42.30 a share. What is your current margin position? Ignore margin interest. A) 48.84 percent B) 78.18 percent C) 65.28 percent D) 46.91 percent E) 63.05 percent 15 80) Yvette recently purchased 500 shares of stock at a cost per share of $43.50. The initial 80) C margin requirement on this stock is 75 percent and the maintenance margin is 40 percent. The stock is currently valued at $44.75 a share. What is her current margin position? Ignore margin interest. A) 74.78 percent B) 76.14 percent C) 75.70 percent D) 74.29 percent E) 76.03 percent 81) You short sold 700 shares of a stock at $25 a share. The initial margin requirement is 75 81) B percent and the maintenance margin is 35 percent. What is the amount of your total liability for this transaction as initially shown on your account balance sheet? A) $22,210 B) $17,500 C) $8,640 D) $37,440 E) $28,800 82) Elizabeth short sold 400 shares of stock at $72 a share. One month later, she covered the 82) B short at a price of $68. What was her total dollar return on this investment? A) -$2,400 B) $1,600 C) $2,200 D) -$920 E) -$1,800 83) Today, you short sold 1,100 shares of Jasper Industrial stock at $48 a share. The initial 83) E margin is 60 percent and the maintenance margin is 30 percent. Which one of the following is correct concerning your account balance sheet for this transaction? A) You have a liability from the short position of $21,120. B) You have an asset of $31,680 from the sale proceeds. C) Your account equity is $21,120. D) Your initial margin deposit is $15,840. E) Your total assets are $84,480. 84) Mark short sold 500 shares of stock at $12.50 a share. The initial margin is 80 percent 84) E and the maintenance margin is 50 percent. The stock is currently selling for $9.80 a share. What is Matt's account equity at this time? Ignore margin interest. A) $4,590 B) $2,070 C) $8,950 D) $10,510 E) $6,350 85) You short sold 500 shares of Jasper stock at $41 a share at an initial margin of 60 85) E percent. What is the highest the stock price can go before you receive a margin call if the maintenance margin is 40 percent? A) $56.90 B) $57.40 C) $47.08 D) $55.50 E) $46.86 86) Jennifer believes that Northern Wine stock is going to decline in value so she is short 86) D selling 1,000 shares at $32 a share. Her initial margin requirement is 70 percent and the maintenance margin is 30 percent. What is the highest the stock price can go before she receives a margin call? A) $40.15 B) $38.97 C) $43.75 D) $41.85 E) $45.77 16 87) Mike short sold 400 shares of DeSoto Lumber stock at $22 a share at an initial margin of 87) B 70 percent. The maintenance margin is 35 percent. What is the highest the stock price can go before he receives a margin call? A) $25.48 B) $27.70 C) $26.22 D) $28.16 E) $24.12 88) The short interest on Blue Water Cruisers stock was 351,900 when the market opened 88) B this morning. During the day, 288,500 shares were covered and 151,600 shares were sold short. What was the short interest on this stock at the end of the trading day? A) 203,100 shares B) 215,000 shares C) 233,100 shares D) 447,900 shares E) 308,100 shares 89) You just sold 1,200 shares of stock short at a price per share of $13.50. The initial 89) D margin requirement is 60 percent and the maintenance margin is 30 percent. What is your initial equity position? A) $7,520 B) $16,200 C) $10,520 D) $9,720 E) $6,480 90) Last week, you sold 300 shares of ABC stock for $6,300. The sale was a short sale with 90) B an initial margin requirement of 70 percent. The maintenance margin is 40 percent. Some positive news concerning the company was released last night and the stock price jumped this morning to $28 a share. What is your current margin position in this stock? A) 48.33 percent B) 27.50 percent C) 61.33 percent D) 56.67 percent E) 38.68 percent 91) Recently, you sold 1,000 shares of stock for $21,400. The sale was a short sale with an 91) A initial margin requirement of 60 percent. The maintenance margin is 30 percent. The stock is currently trading at $27.50 a share. What is your current margin position in this stock? A) 24.51 percent B) 46.69 percent C) 32.09 percent D) 28.11 percent E) 43.98 percent 92) Recently, you sold 500 shares of stock for $16.60 a share. The sale was a short sale with 92) C an initial margin requirement of 70 percent. The maintenance margin is 35 percent. The stock is currently trading at $17.80 a share. What is your current short position in this stock? A) $10,362 B) $11,976 C) $8,900 D) $6,830 E) $4,916 17 93) Neshoba Industries stock is selling for $33 a share. You would like to purchase as many 93) A shares of this stock as you can. Your margin account currently has available cash of $7,000 and the initial margin requirement is 65 percent. What is the maximum number of shares you can buy? A) 326 shares B) 193 shares C) 408 shares D) 287 shares E) 300 shares 94) Sam is purchasing 800 shares of RPT, Inc., stock at a price per share of $15.50. What is 94) A the minimum amount the Federal Reserve will require Sam to pay in cash for this purchase? A) $6,200 B) $10,968 C) $9,800 D) $11,960 E) $4,488 95) Louis purchased 300 shares of stock on margin for $22.15 a share and sold the shares 95) D eleven months later for $24.50 a share. The initial margin requirement was 75 percent and the maintenance margin was 30 percent. The interest rate on the margin loan was 8.5 percent. He received no dividend income. What was his holding period return? A) 10.76 percent B) 8.45 percent C) 7.05 percent D) 11.56 percent E) 9.88 percent 96) Marcia purchased 100 shares of Hyde Foods stock on margin at a price of $35 a share. 96) E The initial margin requirement is 65 percent and the maintenance margin is 35 percent. What is the lowest the stock price can go before Marcia receives a margin call? A) $30.00 B) $33.00 C) $28.00 D) $24.50 E) $18.85 97) Sarah purchased 700 shares of Detroit Motors stock at a price of $45 a share. The initial 97) B margin requirement is 70 percent and the maintenance margin is 30 percent. The effective interest rate on the margin loan is 6.5 percent. How much margin interest will she pay if she repays the loan in five months? A) $217.29 B) $251.25 C) $230.42 D) $187.29 E) $204.12 18  98) You recently purchased 200 shares of stock at a cost per share of $22.25. The initial 98) A margin requirement on this stock is 75 percent and the maintenance margin is 50 percent. The stock is currently valued at $24.00 a share. What is your current margin position? Ignore margin interest. A) 76.82 percent B) 73.83 percent C) 75.69 percent D) 74.95 percent E) 73.01 percent 99) Rylee short sold 600 shares of stock at $16.25 a share. The initial margin is 75 percent 99) E and the maintenance margin is 50 percent. The stock is currently selling for $19.50 a share. What is Rylee's account equity at this time? Ignore margin interest. A) $3,590.25 B) $8,950.00 C) $10,510.35 D) $1,070.75 E) $5,362.50 100) Last week, you sold 800 shares of Ace stock for $24,000. The sale was a short sale with 100) B an initial margin requirement of 70 percent. The maintenance margin is 40 percent. 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? A) 38.68 percent B) 45.71 percent C) 56.67 percent D) 27.50 percent E) 61.33 percent 19