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Data below is applicable to questions 1 35 2. You have been approached by a trader that requires assistance on margin-buying and short-selling on Discovery
Data below is applicable to questions 1 35 2. You have been approached by a trader that requires assistance on margin-buying and short-selling on Discovery Ltd. . He has provided you with the current Bid and Ask price of Discovery Ltd. as well as a forecast of the price in 1 month time (see table below). Assume a portfolio value/ short position of R10 000.00: Bid Ask Todayr R919 R9282 1 Month R1066 R1076? Question 1 Calculate the return assuming that shares are purchased on margin, where the margin amount is 80%, loan 20% and maintenance margin is 40%. A) 4.73% B) s.44% C) 5.41% D) 7.53% E) 5.22%
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