Question: QUESTION 4 Using a 50% margin with initial equity of 10,000 allows a trader to purchase 500 shares at $40/share. The interest rate on debt

QUESTION 4 Using a 50% margin with initial equity of 10,000

QUESTION 4 Using a 50% margin with initial equity of 10,000 allows a trader to purchase 500 shares at $40/share. The interest rate on debt is 4%. If the share price increases to $45/share after one year, the return on equity is, 25% a. b. 12.5% C. 21% O d. 42% e.4%

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