00:01
Hello students, let us solve the problem.
00:02
Here the purchase given is 1000 share, fran at $80 per share, given your brokerage of 50 ,000 to establish your margin account, fran does not pay a dividend, rate on margin is 5 % and the manufacturing expenses is 30%.
00:19
After one year, t is equal to 1.
00:21
What is the price of fran will be? trigger a marginal call.
00:26
There are 4 options given in the question, i .e.
00:28
$45, $65, $105 and $125.
00:33
Let us start solving the problem.
00:35
So our first step is initial margin, calculation of initial margin.
00:50
So the formula will be amount divided by stock value.
01:00
So the amount will be $50 ,000 divided by stock value will be 1000 minus 80, so which gives us 62 .50%.
01:13
So this is our initial margin.
01:22
So our step 2 is calculation of interest per share, calculation of interest per share...