Margin Call J.C. Chandler’s 2011 film Margin Call examines the actions of an investment firm’s key decision makers during the earliest stages of the most recent financial crisis. Chandler does a good job with the characters of this movie he isn’t necessarily looking for a villain in a mess like this nor any lengthy explanations; he’s going deeper than that. He goes more for societal costs of high finance, the power of self-rationalization, and the easy embrace of personal corruption. The movie
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Margin Call Margin call is an independent drama film of a investment bank firm that takes place over a 36 hour period after discovering a huge financial crisis that is about to occur. Each character takes part in a story that shows their emotions and actions of how to handle an economic downturn. In the beginning of the movie, many of the employees are being laid off and that includes Head Risk Manager, Eric Dale. Before he leaves, he hands Junior Risk Analyst, Peter Sullivan, a USB of his project
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Margin call is an american movie, realizd by JC Chandor in 2011 The story This movie explains how crisis in 2008 happened in a financial institution in New York. The company exists since 137 years with John Tuld as the Chief Executive Officer. The leader of trading operation is Sam Rogers. He is in the company since 34 years. First of all, there is the layoff of Eric Dale, the financial analyst. We can see a comparison with Lehman Brothers when bankers leave the company with a case under
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to do the right things, sometimes I don’t even know what the right thing is. The movie Margin Call is a good example of an ethical dilemma that we may face when we enter the real world. We can see that different characters have different perceptions of what is right to them. The whole movie was based on the true stories in Wall Street back in 2008. Contrast to other financial crisis movies, the movie Margin Call particularly emphasis on the describing the brutal competition and the ruthlessness of
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remainder of the purchase price from your broker. The rate on the margin loan is 6% and is paid at the end of the year. A) What is percentage increase in the net worth of your brokerage account if the price of the stock immediately changes to: (i) $18; (ii) $20; (iii) $22? i. -20% ii. 0% iii. 20% B) If the maintenance margin is 30%, how low can ABC’s stock price fall before you get a margin call? 10000/.7=14286/1000 = $14.29/Share C) What
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FOR THE NEXT THREE PROBLEMS Jackie has a margin account with a balance of $150,000. If the initial margin deposit is 60 percent and Turtle Industries is currently selling at $50 per share: (a) 1 How many shares of Turtle can Jackie purchase? (b) 2 What is Jackie's profit/loss if Turtle’s price after one year is $40? (d) 3 If the maintenance margin is 25 percent, to what price can Turtle Industries fall before Jackie receives a margin call? USE THE FOLLOWING INFORMATION FOR THE NEXT
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can the price drops (immediately) if the maintenance margin is 30%: Value of shares is 200P, equity is 200P - 5,000 so 0.30 60P = (200P - 5,000)/ 200P = 200P - 5,000 140P = 5,000 P = 35.7143 So the price can drop up to 38.57 per share before I get a margin call. 2) Short sell 500 shares and each has a current price of $40 so the value of the stocks for short selling is 500 x 40 = 20,000. 15,000 dollars is given to the broker for the margin account. A) Assume there is no dividend, no interest
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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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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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FIN-672 Securities Analysis & Portfolio Management Professor Michel A. Robe Practice Set #1 and Solutions. What to do with this practice set? To help MBA students prepare for the assignment and the exams, practice sets with solutions will be handed out. These sets contain select worked-out end-of-chapter problems from BKM4 through BKM6. These sets will not be graded, but students are strongly encouraged to try hard to solve them and to use office hours to discuss any problems they may have
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