Margin Questions 1. Assume that an investor buys 100shares of stock at RM 50.00‚ putting up a 60% margin. a. What is the debit balance in this transaction? b. How much equity capital must the investor ‘s new margin position 2. Assume that an investor buys 100 shares of stock at RM 50.00 per share‚ putting up a 70% margin. a. What is the debit balance in this transaction? b. How much equity funds must the investor provide to make this margin transaction? c. If the
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Lecture 3 1. Assume you purchased 700 shares of XYZ common stock on margin at $50 per share from your broker. If the initial margin is 65%‚ how much did you borrow from the broker‚ what is the margin? 2. You purchase 100 shares at $60 per share and margin = 50%. Suppose stock rises to $80/sh (increase of 33%). What is your return? Suppose stock drops to $40/sh (decrease of 33%). What is your return? 3. Investor opens a brokerage account and purchases 300 shares of XYZ at $40 per share. She borrows
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$800‚000 Variable costs (380‚000) Contribution margin $420‚000 Contribution margin ratio = $420‚000/$800‚000 = 0.525 Annual break-even dollar sales volume = $210‚000/0.525 = $400‚000 b. Annual margin of safety in dollars: Sales $800‚000 Break-even sales dollars (400‚000) Margin of safety $400‚000 c. To determine the variable and total costs lines‚
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split occurs: A) by adjusting the divisor. B) automatically. C) by adjusting the numerator. D) quarterly‚ on the last trading day of each quarter. E) none of the above. 2 7.You sold short 200 shares of common stock at $60 per share. The initial margin is
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Management estimates the probability of each scenario occurring to be: rapid growth (.30); average growth (.50)‚ and slow growth (.20). Petal Providers net profit margins are also expected to vary with the level of economic activity next year. If slow grow occurs‚ the net profit margin is expected to be 5 percent. Net profit margins of 7 percent and 10 percent are expected for average and rapid growth scenarios‚ respectively. A. Estimate the average sales growth rate for Petal Providers for
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to achieve $200‚000 profit 6.40 (x) - $525‚000 = 200‚000 x = 113‚282 units needed 2. a.) Unit contribution and contribution margin: $20 4.00 - .50 - .50 = $15 unit contribution $15 / 20 = 75 % contribution margin b.) Break-even point in units? In dollars? $15 (x) 125‚000 5‚000 10‚000 35‚000 = 0 11‚667 units are needed
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format centers on the idea that each unit sold provides a certain amount of contribution margin that goes to covering fixed costs. In 2004 expenses like distribution and transport (29‚988) and the sales commissions (73‚573) have been reclassified (contribution format) as variable selling costs on page 33 ([104]). 2. Why do you think cost of sales is included in the computation of contribution margin on page 33? Benetton’s cost of sales includes some fixed expenses but most of the
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will do. The basic As/Sold As Matrix" (400‚000 x 400‚000). Obviously‚ idea of the relative sales value scheme is that all sales the possible combinations are endless‚ so how does one should show gross margin percent equal to the average choose a "best" approach? The "best" solution is to gross margin percent across the full joint product set. start with demand for the highest value product (405) This average is 19% [(246 - 200) (246)]. This does and work back unsold production to the next lowest
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Margin Trading: Margin Trading refers to the practice by which one can purchase share in the higher amount than the money investor already have and it also helps to sell the security which is not owned by the investor. Margin trading‚ therefore‚ is used in both long & short position. Long position refers to buying of security own share in an expectation of drastically or dramatically price increase. But short position refers to selling of own security or short selling of others security‚ which
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Increasing Profit Margins Proposal for Artemis Sportswear Profit Margin is a ratio that is calculated by dividing net profits of a company by its sales. This ratio measures how much of every dollar generated by sales is retained in company’s earnings. Generally speaking‚ a higher profit margin indicates that a company is more profitable and has better control of its operational expenses. Gross profit margin can also be used to set and monitor sales goals for your company. Because the costs of
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