Suppose you purchase 500 shares of stock at $48 per share with an initial cash investment of $8,000. The call money rate is 5 percent and you are charged a 1.5 percent premium over this rate. |
a. |
Calculate your return on investment one year later if the share price is $56. Suppose instead you had simply purchased $8,000 of stock with no margin. What would your rate of return have been now? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the "%" sign in your response.) |
Rate of return | % |
Without margin, rate of return | % |
b. |
Calculate your return on investment one year later if the share price is $48. Suppose instead you had simply purchased $8,000 of stock with no margin. What would your rate of return have been now? (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Omit the "%" sign in your response.) |
Rate of return | % |
Without margin, rate of return | % |
c. |
Calculate your return on investment one year later if the share price is $32. Suppose instead you had simply purchased $8,000 of stock with no margin. What would your rate of return have been now? (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places. Omit the "%" sign in your response.) |
Rate of return | % |
Without margin, rate of return | % |
Suppose you purchase 500 shares of stock at $48 per share with an initial cash investment...
Suppose you purchase 600 shares of stock at $33 per share with an initial cash investment of $9,900. The call money rate is 5 percent and you are charged a 1.5 percent premium over this rate. Ignore dividends. a. Calculate your return on investment one year later if the share price is $41. Suppose instead you had simply purchased $9,900 of stock with no margin. What would your rate of return have been now? (Do not round intermediate calculations. Enter...
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Suppose you purchase 516 shares of stock at $29.11 per share with an initial cash investment of $11501. Suppose the call money rate is 3.31 percent and you are charged a 1.5 percent premium over this rate. Calculate your return on investment (in percent) if the share price one year later is $2.50 below the price when you bought the stock. Ignore dividends. Answer to two decimals. Show steps**
Suppose you purchase 550 shares of stock at $81 per share with an initial cash investment of $29,000. If your broker requires a maintenance margin of 35 percent, at what share price will you be subject to a margin call? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
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