You deposit $100,000 cash in a brokerage account and purchase $200,000 of stocks on margin by borrowing
Question:
You deposit $100,000 cash in a brokerage account and purchase $200,000 of stocks on margin by borrowing $100,000 from your broker. Later, the value of your stock holdings falls to $150,000, whereupon you get nervous and close your account. What is the percentage return on your investment (ignore interest paid)?
a. 0 percent
b. −25 percent
c. −50 percent
d. −75 percent.
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Related Book For 
Fundamentals Of Investments Valuation And Management
ISBN: 9781266824012
10th Edition
Authors: Bradford Jordan, Thomas Miller, Steve Dolvin
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