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An investor trades on margin. He borrows at 7% APR interest cost, and he uses full amount of initial margin at 40%. Assuming that there
An investor trades on margin. He borrows at 7% APR interest cost, and he uses full amount of initial margin at 40%. Assuming that there are 365 days in a year. He initially purchases at $70 and after 180 days, sells at $68. What is the leverage factor?
1.4
2.6
3.7
4.4
none of the above
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