You are an investor and you start with $10,000 of equity. From there you borrow $20,000 from your broker. With the $30,000 you now have, you buy 238.1 shares of IBM at $126 per share. Let’s look at this position on our investment balance sheet Download investment balance sheet and make the following assumptions: IBM goes down 5% or up 10% You don’t pay interest on the borrowed $20,000 There is no interest on the margin loan and also no dividends paid by the stock Given the information in the balance sheet and the assumptions, What is the P&L on the positions if the stocks of IBM fall 5% or rise 10%?

Answer rating: 100% (QA)

1 IBM FALL 5 PL Ac PARTICULARS QTY RATE AMOUNT PARTICU... View the full answer