The margin requirement
Margin requirement
Financial leverage
Nora wants to purchase a stock on margin. Her broker will allow a 70% margin requirement. Nora wants to invest SAR 15,000 in the stock.
How much will the broker loan for the purchase?
4.3b The Short Sale
Long position
Short position
Nora believes a stock will decline in value, she borrows and sells a share for SAR 200.
4.3c Other Securities
Exchange-traded funds and mutual funds
Derivatives
Futures contract
Mutual funds
Exchange-traded funds
Ali wants to make two stock investments, one is a long position in stock A and one is a short position in stock B.
What is Ali’s total gain/loss from the short position?
A futures contract is an agreement to buy or sell a commodity or