Answered step by step
Verified Expert Solution
Question
1 Approved Answer
A trader has purchased 300 shares of a ABC stock on margin at a price of $55 per share. The leverage ratio is 2.5. Six
A trader has purchased 300 shares of a ABC stock on margin at a price of $55 per share. The leverage ratio is 2.5. Six months later, the trader sells these shares at $65 per share. Assuming interest rate during the six-months period is 6% and dividend per share is $0.8. Ignoring transaction cost, what was the return to the trader during the six-month period? (answer in decimals, three decimals )
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started