Question
Suppose you have $10,000 but you choose to borrow another $10,000 on margin allowing you to buy $20,000 in a stock with a price of
Suppose you have $10,000 but you choose to borrow another $10,000 on margin allowing you to buy $20,000 in a stock with a price of $50 per share. If the stock price falls to $45 per share over the coming year and you are paying 7% on the margin loan, what is your return on your investment?
*Please show work - Answer as a percentage please.
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Elementary Statistics
Authors: Mario F. Triola
12th Edition
0321836960, 978-0321836960
