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( ii ) Assume you purchased the shares of the XYZ company listed on the GSE for GHS 1 0 . 0 0 per share.

(ii) Assume you purchased the shares of the XYZ company listed on the GSE for GHS
10.00 per share. Assume margin trading is allowed and that the margin requirement is 50%,
meaning one can pay 50% of the value of shares bought and the remaining amount is paid
with borrowed funds arranged by your broker at 25% per annum. As it is the case, a
commission of 2.5% is attracted for purchases and sale of shares on the GSE. Assume in
the course of the year XYZ paid dividend of GHSO.5 per share. If the investor sold his
shares in xYZ at the end of one year for GHS16.5, calculate (a) the return on the equity of
the investor (b) the return on the investment of this investor. (6 marks)
(iii) Assuming at the end of the year the share price drops from GHS10.00 to GHS7.00,
calculate (a) the return on investor's equity (b) the return on investment of the investor.
(6 marks)
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