Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Investor bought 10,000 shares of ABC Corporation at $4.00 on margin at the beginning of the year. Specifically, the investor used $20,000 of her own
Investor bought 10,000 shares of ABC Corporation at $4.00 on margin at the beginning of the year. Specifically, the investor used $20,000 of her own money and borrowed the rest at an interest rate of 5% p.a. to fund the purchase. Calculate the total return over the year for the margin trader.
Note: Answers should be expressed in percentage rounded to the nearest 0.1% - for example, enter 0.123456 as 12.3 (%) in the answer box below. Intermediate results should not be rounded to less than 6 decimal places.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started