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Problem 3 - 0 1 eBook Problem 3 - 0 1 You have $ 3 6 , 0 0 0 to invest in Sophie Shoes,

Problem 3-01
eBook
Problem 3-01
You have $36,000 to invest in Sophie Shoes, a stock selling for $60 a share. The initial margin requirement is 75 percent. Do not round intermediate calculations. Round your answers to two decimal places. Use a minus sign to enter negative values, if any.
a. Ignoring interest and commissions, calculate your rate of return if the stock rises to $80 a share and if it declines to $30 a share, assuming you pay cash for the stock.
Rate of return if the stock rises to $80 a share:
%
Rate of return if the stock declines to $30 a share: 1]%
b. Ignoring interest and commissions, calculate your rate of return if the stock rises to $80 a share and if it declines to $30 a share, assuming you buy the stock using maximum leverage.
Rate of return if the stock rises to $80 a share:
%
Rate of return if the stock declines to $30 a share:
%
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