Question
Barbara buys 130 shares of DEM at $32.00 a share and 200 shares of GOP at $41.00 a share. She buys on margin, and the
Barbara buys 130 shares of DEM at $32.00 a share and 200 shares of GOP at $41.00 a share. She buys on margin, and the broker charges interest of 5 percent on the loan.
If the margin requirement is 52 percent, what is the maximum amount she can borrow? Round your answer to the nearest cent.
$
If she buys the stocks using the borrowed money and holds the securities for a year, how much interest must she pay? Round your answer to the nearest cent.
$
If, after a year, she sells DEM for $24.00 a share and GOP for $26.00 a share, how much did she lose on her investment? Use a minus sign to enter the amount as a negative value. Round your answer to the nearest cent.
$
What is the percentage loss on the funds she invested if the interest payment is included in the calculation? Use a minus sign to enter the amount as a negative value. Round your answer to two decimal places.
%
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