Currently, the price of Mattco stock is $30 a share. You have $30,000 of your own funds
Question:
Currently, the price of Mattco stock is $30 a share. You have $30,000 of your own funds to invest. Using the maximum margin allowed, what is your percentage profit or loss under the following situations (ignore dividends and taxes)? What would the percentage profit or loss be in each situation if margin were not used?
a. You purchase the stock and it rises to $33 a share
b. You purchase the stock and it rises to $35 a share
c. You purchase the stock and it falls to $25 a share
d. You purchase the stock and it falls to $20 a share
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a margin 66000 stock value 30000 repayment 36000 new equity value 300...View the full answer
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Related Book For 
Introduction to Finance Markets, Investments and Financial Management
ISBN: 978-1119398288
16th edition
Authors: Ronald W. Melicher, Edgar A. Norton
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