Question
Bob Orleans invested $3,000 and borrowed $3,000 to purchase shares in Verizon Communications. At the time of his investment, Verizon was selling for $47 a
Bob Orleans invested $3,000 and borrowed $3,000 to purchase shares in Verizon Communications. At the time of his investment, Verizon was selling for $47 a share. If Bob paid a $30 commission, how many shares could he buy if he used only his own money and did not use margin? If Bob paid a $60 commission, how many shares could he buy if he used his $3,000 and borrowed $3,000 on margin to buy Verizon stock? Assume Bob did use margin and paid a $60 total commission to buy his Verizon stock. Also, assume he paid another $60 to sell his stock and sold the stock for $54 a share. How much profit did he make on his Verizon stock investment?
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