Essay
An investor purchased Orange Computer on margin for $30 a share. The stock's price subsequently increased to $50 a share at which time the investor sold the stock. If the margin requirement were 60 percent and the interest rate on borrowed funds were 7 percent, what would be the percentage earned on the investor's funds (excluding commissions)? What would have been the return if the investor had not bought the stock on margin?
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Cost of the stock: $30
Margin requirem...View Answer
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Correct Answer:
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Margin requirem...
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