Question
Suppose you want to buy 400 shares of stock at $75 per share. Initial margin requirement is 65%. Call money rate plus the spread is
Suppose you want to buy 400 shares of stock at $75 per share. Initial margin requirement is 65%. Call money rate plus the spread is 7%. You supplied cash just to meet the initial margin requirement and invested the rest on margin.
What is your HPR and EAR if the price is $60 6 months later?
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Guardians Of Finance
Authors: James R. Barth, Gerard Caprio, Ross Levine
1st Edition
0262526840, 978-0262526845
