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stock will be sold for $62.50 in a year Suppose you find the following information for Tesla stock (TSLA): The minimum margin requirement-30% Current stock

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stock will be sold for $62.50 in a year

Suppose you find the following information for Tesla stock (TSLA): The minimum margin requirement-30% Current stock price $50 per share No dividend is expected within a year The interest rate on a margin loan is 6% per annum You have an assessment of the TSLA price probability distribution next year as below: Bear Market 0.2 45 Normal Market Bull Market Probability TSLA price 0.5 0.3 You bought 600 shares of the stock with $15,000 of your own funds. c) What is the rate of return of your investment if the price in one year is as predicted by the probability distribution above

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