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1. You are advised to invest in Apple stock. The company is currently selling its stock at $150 per share. You have only $72 000,
1. You are advised to invest in Apple stock. The company is currently selling its stock at $150 per share. You have only $72 000, but you are advised to buy on margin since the price is expected to increase. The interest rate for the loan is 8%. A) If the initial margin is 60%, calculate how many shares you will be able to buy if you borrow the rest 40% of the money? Set the initial balance sheet. B) Calculate the current % margin if instead of increasing the stock price will fall at the price of $130. C) How much can the stock price fall before the investor gets a margin call, if the Maintenace margin is 40%? D) What would be the rate of return if the price increases by 20%
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