Question: Your margin account requires an initial margin of 5 0 % , and a maintenance margin of 3 0 % . You deposit $ 7

Your margin account requires an initial margin of

50 %,

and a maintenance margin of

30 % .

You deposit $

78, 000

cash in a brokerage account and purchase stocks using all available margin and borrowing the rest from your broker. Later, the value of your stock holdings goes to $

112, 000 .

What is your dollar return?

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