1 answer

Suppose that XYZ currently is trading at $20 per share. You buy 1,000 shares using $15,000...

Question:

Suppose that XYZ currently is trading at $20 per share. You buy 1,000 shares using $15,000 of your own money, borrowing the remainder of the purchase cost from your broker. The rate on the margin loan is 8%.

a) What is your rate of return if the price of XYZ immediately changes to $22?

b) With the same information on stock XYZ and your initial margin above, assume a year has passed. How low can XYZ's price per share fall before you get a margin call if the maintenance margin is 25%?


Answers

っ 0-106661 ILO , 67 1 : 1 0 čor-sooo 0.os looox ood DC2 pouw

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