Question
1: You want to buy 200 shares of AAPL, at $215 a share. What if you purchased those shares with maximum margin? Your brokerage will
1: You want to buy 200 shares of AAPL, at $215 a share.
What if you purchased those shares with maximum margin?
Your brokerage will charge interest on the amount borrowed, at call money rate.
Lets say the rate is 8%. If AAPL goes up to $240 in one year. What is your gain in nominal terms and percentage?
What if AAPL stock gone down to $180?
2: Suppose you decided to buy 100 shares of AMZN at $1150 a share with maximum margin. The margin interest is 6%. In one year, the stock price will either be $1330 or $1000.
What is your gain/loss percentage with and without margin?
Lets say the maintenance margin is 35%, what is the price that you will get a margin call?
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