Question: Megan bought 200 shares of stock at a price of $10 a share, using a margin loan of 30%. The maximum margin loan allowed by

Megan bought 200 shares of stock at a price of $10 a share, using a margin loan of 30%. The maximum margin loan allowed by the margin lender is 60%. Megan sold her shares after a year for $12 a share. Using the information above to answer questions 10 and 11.

10. Ignoring margin interest and trading costs, what is Megan's return on investor's equity for this investment?

A. 67%.

B. 29%.

C. 14%.

D. 10%.

11. Ignoring margin interest and trading costs, what is the maintenance price for this investment?

A. $5.

B. $7.

C. $8.

D. $7.3

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