Q) Consider an an investor who purchases 100 shares of Company XYZ stock at $100 per share.
Fantastic news! We've Found the answer you've been seeking!
Question:
Q) Consider an an investor who purchases 100 shares of Company XYZ stock at $100 per share. The investor funds half the purchase price with their own money and buys the other half on margin, bringing the initial cash outlay to $5,000. One year later, the share price become $200 One year later share price become $50.
Required :
Comment on the above mentioned both situations?
Support your answer with calculation.
What would be the pros and cons of margin financing?
Related Book For
Probability And Statistics
ISBN: 9780321500465
4th Edition
Authors: Morris H. DeGroot, Mark J. Schervish
Posted Date: