You purchase 1,000 shares MSFT stock on margin at a price of $150/share. The margin rate...

 

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You purchase 1,000 shares MSFT stock on margin at a price of $150/share. The margin rate is 5% continuously compounded. The margin loan is $50,000. You want to analyze your potential returns under three scenarios for MSFT's stock price over the next year: i) $120/share ii) $150/share iii) $180/share Fill in the table below to show your work. Asset Margin Loan Equity % Return Current Value $120/share MSFT Stock Price 1-year Later $150/share $180/share You purchase 1,000 shares MSFT stock on margin at a price of $150/share. The margin rate is 5% continuously compounded. The margin loan is $50,000. You want to analyze your potential returns under three scenarios for MSFT's stock price over the next year: i) $120/share ii) $150/share iii) $180/share Fill in the table below to show your work. Asset Margin Loan Equity % Return Current Value $120/share MSFT Stock Price 1-year Later $150/share $180/share

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To analyze the potential returns under the given scenarios we first need to calculate the initial ma... View the full answer