Suppose that Nocetti Inc. is currently selling at $50 per share. I a. How much will...
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Suppose that Nocetti Inc. is currently selling at $50 per share. I a. How much will it cost you to buy 500 shares? b. Create a data table in Excel summarizing your rate of return in one year allowing year-end price to range from $25 to $75 at $2.50 increments. c. Plot the price of the stock against the rate of return. Make sure to label the x- and y- axis. d. Now assume you buy 500 shares borrowing 25% of the necessary funds from your broker; that is the initial margin on your position in 25%. Your broker charges an interest rate of 8% on margin loans. How much of your own money do you invest? How much do you borrow from your broker? e. Create a data table in Excel summarizing your rate of return in one year allowing year-end price to range from $25 to $75 at $2.50 increments. f. Plot the price of the stock against the rate of return assuming you use your margin account. Make sure to label the x- and y-axis. g. Discuss the advantages and disadvantages of trading using margin. Suppose that Nocetti Inc. is currently selling at $50 per share. I a. How much will it cost you to buy 500 shares? b. Create a data table in Excel summarizing your rate of return in one year allowing year-end price to range from $25 to $75 at $2.50 increments. c. Plot the price of the stock against the rate of return. Make sure to label the x- and y- axis. d. Now assume you buy 500 shares borrowing 25% of the necessary funds from your broker; that is the initial margin on your position in 25%. Your broker charges an interest rate of 8% on margin loans. How much of your own money do you invest? How much do you borrow from your broker? e. Create a data table in Excel summarizing your rate of return in one year allowing year-end price to range from $25 to $75 at $2.50 increments. f. Plot the price of the stock against the rate of return assuming you use your margin account. Make sure to label the x- and y-axis. g. Discuss the advantages and disadvantages of trading using margin.
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Answer rating: 100% (QA)
a To buy 500 shares at 50 per share it will cost 25000 b To create a data table in Excel summarizing your rate of return in one year follow these step... View the full answer
Related Book For
Essentials Of Corporate Finance
ISBN: 9780073405131
6th Edition
Authors: Stephen A. Ross, Randolph Westerfield, Bradford D. Jordan
Posted Date:
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