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QUESTION 5 The amount od debt is $10,000 and there are 500 shares purchased. The shares were purchased at a price of $40/share. The maintenance
QUESTION 5 The amount od debt is $10,000 and there are 500 shares purchased. The shares were purchased at a price of $40/share. The maintenance margin is 30%. If the share price decreases to $30/share after one year. I. The return on equity is -54% II. A margin call will be issued III. Leverage has made the return on equity worse than a straight cash purpose a. I only Ob. I and III only Oc. I, II, and III d. II and III only e. I and II only
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