Joseph purchased 1000 stocks of Airbus on 18 th May at the price of $6.45 per share
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Question:
Joseph purchased 1000 stocks of Airbus on 18th May at the price of $6.45 per share using the margin trading facility offered by his broker. The broker requires 50% initial margin and 40% maintenance margin. There are no transaction fees and the broker charges no interest or fees for the margin trading facility. On 23rd May, Joseph sells the Airbus stocks he purchased at the price of $6.35 per share.
- Calculate the rate of return he earned as a percentage of his initial investment.
- What would have been the rate return from Joseph’s investment in Airbus have had he not used the margin trading facility
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
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