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Buying on Margin - an example: - Suppose an investor want to purchase 100ABC stocks. Stock ABC is currently traded at $150 per share. The
Buying on Margin - an example: - Suppose an investor want to purchase 100ABC stocks. Stock ABC is currently traded at $150 per share. The investor has only $10,000 and want to borrow the remaining amount from the broker (buying on Margin). - Why do investors buy on margin? - Calculate investors return if the stock price is $200 after one year. Assume the investor did not buy on margin and she manages to purchase with whatever money she has
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