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Margin and Short Sales Suppose that you are looking at the price of Kellogg's and you see that it is selling at $60 a share.
Margin and Short Sales Suppose that you are looking at the price of Kellogg's and you see that it is selling at $60 a share. For the first part of this question assume you buy 1000 shares using $50000 of your own money, borrowing the rest of the purchase from your broker. The interest rate on the margin loan is 8% annually (a) What is the percentage increase in the net worth of your brokerage account if the price of Kellogg's immediately changes to (i) $66 a share (ii) $55 a share Margin and Short Sales Suppose that you are looking at the price of Kellogg's and you see that it is selling at $60 a share. For the first part of this question assume you buy 1000 shares using $50000 of your own money, borrowing the rest of the purchase from your broker. The interest rate on the margin loan is 8% annually (a) What is the percentage increase in the net worth of your brokerage account if the price of Kellogg's immediately changes to (i) $66 a share (ii) $55 a share
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