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The current market price of AWZ stock is $50 per share and you have $5000 of your own to invest. You borrow an additional $5000
The current market price of AWZ stock is $50 per share and you have $5000 of your own to invest. You borrow an additional $5000 from your broker and invest $10,000 in the stock. Assume the interest rate is 2% and maintenance margin is 40%. 1) What will be your rate of return if the price goes up by 8% after 6 months? 2) What is the minimum price before a margin call after a year? Please show your work.
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