Joseph purchased 1000 stocks of Airbus on 18^th 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 23^rd May, Joseph sells the Airbus stocks he purchased at the price of $6.35 per share.

1. Calculate the rate of return he earned as a percentage of his initial investment.
2. What would have been the rate return from Joseph’s investment in Airbus have had he not used the margin trading facility

Answer rating: 100% (QA)

Calculating Josephs Rate of Return with Margin Trading 1 Calculate the amount invested Total ... View the full answer