Question
A trader purchases 100 shares of Omega Inc. on margin for $30 per share. He sells his shares after one year at $24 per share.
A trader purchases 100 shares of Omega Inc. on margin for $30 per share. He sells his shares after one year at $24 per share. The following information is also available:
Dividend received on the stock | $0.30 per share |
Commission paid | $0.10 per share |
Leverage ratio | 2.0 |
Call money rate | 6% |
- What is the total return on this investment?
- Why is the loss greater than the 20% decrease in the market price?
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1The return on investment Total gain on transaction 240...
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Advanced Accounting
Authors: Debra C. Jeter, Paul Chaney
5th Edition
1118022297, 9781118214169, 9781118022290, 1118214161, 978-1118098615
