Question: please include formulas/steps to this question. Example: The Effects of Margin, I. 000 DO 258000 You have $30000 in a margin account that requires 60%

please include formulas/steps to this question.

Example: The Effects of Margin, I. 000 DO 258000 You have $30000 in a margin account that requires 60% initial margin. You can buy $50000 of stock with this account (why?). Your borrowing rate from your broker is 6.00 %. Suppose you buy 1,000 shares of IBM, for $ 50/ share. Assume no dividends, and that your borrowing rate is still 6.00%, what is your return if : S20000/0.5= $10 - In one year, IBM stock is selling for $ 60 per share? - In one year, IBM stock is selling for $ 60 per share, but you did not borrow money from your broker

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