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Stock transactions: Margin trading Suppose Juanita wants to purchase 1 , 0 0 0 shares of Hydroflex stock at $ 5 0 per share through
Stock transactions: Margin trading
Suppose Juanita wants to purchase shares of Hydroflex stock at $ per share through Kansas Brokerage. The value of the shares is
If Juanita does not have enough funding to purchase the shares herself, and Kansas Brokerage requires an initial margin of at least percent, in order for Kansas Brokerage to lend her the funds. If Juanita invests this amount, then Kansas Brokerage would cover the remaining value of the stock. receive a margin call from Kansas Brokerage.
If Kansas Brokerage requires a percent annual interest payment on the loaned funds, the shares paid out an annual divided of $ per share, and Juanita sold the shares at the end of the year when the price dropped to $ per share, then what would her return on stocks purchased on margin be
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