If the stock price drops to $60, the % margin in the account is 25%. This is
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If the stock price drops to $60, the % margin in the account is 25%. This is calculated by taking the amount of money you put in initially (in this case $500) divided by the total value of the stock (in this case $1000 x $60 = $6,000). This comes to 500/6000 = 0.083 which is equal to 25%. The rate of return is -25%, which is calculated by taking the difference between the current value of the stock and the original cost of the stock (($60 - $80) / $80 = -25%).
How is .083 equal to 25%??
Related Book For
Modeling the Dynamics of Life Calculus and Probability for Life Scientists
ISBN: 978-0840064189
3rd edition
Authors: Frederick R. Adler
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