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6. An investor buys $16,000 worth of a stock priced at $20 per share using 60% initial margin and requires 35% maintenance margin. (Assuming the
6. An investor buys $16,000 worth of a stock priced at $20 per share using 60% initial margin and requires 35% maintenance margin. (Assuming the broker does not charge interests for the margin loan). 1) How far does the price have to fall for the investor to get a margin call? 2) What's the investor's rate of return if the price goes up by 5%? How do you interpret your answer? 3) If the stock pays a $0.5 dividend in year 1, the stock is sold at $23 per share. What was the investor's rate of return
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