Question: Problem 6 (20 Points): Dylan opens a brokerage account and purchases 300 shares of Internet Dreams at $40 per share. The initial margin is 60%
Problem 6 (20 Points): Dylan opens a brokerage account and purchases 300 shares of Internet Dreams at $40 per share. The initial margin is 60% and he borrows the maximum that is allowed from his broker to help pay for the purchase. The interest rate on the loan is 8%. Part 1 (10 Points): If the share price increases to $50 per share by the end of the year, what is the margin in his account? (show your steps) Part 2 (10 Points): What is the rate of return on his investment? (show your steps)
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