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Shares are currently trading at $100. An investor uses $2500 of its own money plus $2500 in debt (initial margin equals o.5). Thus, the investor
Shares are currently trading at $100. An investor uses $2500 of its own money plus $2500 in debt (initial margin equals o.5). Thus, the investor purchases 50 shares. Interest on debt is 5%. After one year the shares have increased in value to $102.5. The return on equity (ROE) is
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