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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
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 aboveStep by Step Solution
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