Cisco is selling at $45 a share. You would like to buy 200 shares for $42 per share using 60% margin. Cisco pays no dividends and the interest rate on a margin loan is 6%. What type of order would you place to buy Cisco at $42? Assuming your order gets executed for $42, how much money would you have to put up? If Cisco price rises to $48 after one year and you sold the stock for that amount, what is the interest cost? What is the return on equity?

Cisco is selling at $45 a share. You would like to buy 200 shares for $42 per share using 60% margin. Cisco pays no dividends and the interest rate on a margin loan is 6%. - What type of order would you place to buy Cisco at $42 ? - Assuming your order gets executed for $42, how much money would you have to put up? - If Cisco price rises to $48 after one year and you sold the stock for that amount, what is the interest cost? - What is the return on equity