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Suppose the call money rate is 5 . 8 percent, and you pay a spread of 1 . 9 percent over that. You buy 1
Suppose the call money rate is percent, and you pay a spread of percent over that. You buy shares at $ per share with an initial margin of percent. One year later, the stock is selling for $ per share and you close out your position.
Do not round intermediate calculations. Round your final answers to decimal places, without using separators.
What is the amount of margin and margin loan?
Margin: $
Margin loan: $
If the stock falls below what price, you will receive a margin call from your broker?
Critical Price: $
What is your holding period return assuming no dividends are paid?
year HPR :
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