Question: QUESTION 2 A. Explain about margin trading and TWO (2) advantages of margin trading. (6 marks) B. Sally purchase 1200 shares of SHAM BHD stock

QUESTION 2 A. Explain about margin trading and TWO (2) advantages of margin trading. (6 marks) B. Sally purchase 1200 shares of SHAM BHD stock on margin at a price of RM70 per share. The broker requires him to deposit RM21000. Find: i) The loan amount from broker. (3 marks) ii) The initial percentage of margin. (3 marks) What is the Internal Rate of Return (IRR) on an investment costing RM20000 today that you expect will be worth RM22500 at the end of 10 year holding period? (4 marks) c. (Total: 16 marks)

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