USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 53

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
Jackie has a margin account with a balance of $150,000. The initial margin deposit is 60 percent and Turtle Industries is currently selling at $50 per share.
-Refer to Exhibit 3.1. What is Jackie's profit/loss if Turtle's price after one year is $40?

• A) $50,000
• B) -$50,000
• C) $100,000
• D) -$100,000
• E) $40,000

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Definitions:

Reducing Risk

Strategies and actions taken to minimize potential losses or the likelihood of undesirable outcomes in investment, operational, and financial activities.

Demand Curve

A visual chart that illustrates the connection between a product's price and the amount of it consumers want to buy.

Stock Market

A marketplace where securities such as stocks and bonds are bought and sold.

Elasticity

A measure of how much the quantity demanded or supplied of a good responds to a change in one of its determinants, such as price.