Buy 100 shares at $60 per share, Margin requirement 50%, Maintenance margin 25%, Interest on loan 10%
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Question:
Calculate investor's profit/loss in $ AND investor's rate of return in %
i) if price increases by 25% from $60 to $75
ii) if price decreases by 25% from $60 to $45
iii) What conclusion can you make based on the above answers?
What are the advantages of Margin trading?
Related Book For
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1337614689
9th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
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