Using the following assumptions, calculate the rate of return on a margin transaction for an investor who purchases the stock and the stock price at which the investor who shorts the stock will receive a margin call. Market Price Per Share: $25 Number of Shares Purchased: 1000 Holding Period: 1 year Ending Share Price: $22 Initial Margin Requirement: 50% Maintenance margin: 25% Transaction and borrowing costs: $0 The company pays no dividends What of the following choices is closest to the correct answer The margin transaction return and margin call are: Margin Transaction ReturnMargin Call（）①A. -24.00% $16.67 ②B. -12.00% $16.67 ③C. -24.00% $30.00
A. ①
B. ②
C. ③
参考答案：C
解析：
Margin Return % =[((Ending Value - Loan Payoff)/Beginning Equity Position) - 1]×100=[(([$22×1000]-[$25×1000×0.503)/($25×0.50×1000))-1]×100=-24.00%. Alternative (Check): Calculate the all cash return and multiply by the margin leverage factor =[(22000-25000)/25000]×[1/0.50]=-12.00%×2.0=-24.00%. Since the investor is short (sold the stock), the formula for the margin call price is: Margin Call = ( original price)×( 1 + initial margin)/( 1 + maintenance margin) = $25×(1+0.50)/(1+0.25)=$30.00.