Problem 2: The point here is to show how margin can magnify the gains to investors. (Note that the reverse is true as well in that losses can be magnified; in addition, the investor may be hit by a margin call.) P.-S 10/share; Total Value,-$1,000 P",-$14/share: Total Value-S 1,400 Case 1: 100% Margin Case2: 60% Margin Case 3: 40% Margin Thus: Increase in profit $1,400-$1,000-$400. Equty? |%AEquity, Equity-i-Equity, Equity Casel: 100% Margin Case2: 60% Margin Case3: 40% Margin