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You are bullish on Telecom stock. The current market price is $50 per share, and you have $5,000 of your awn to invest You borrow
You are bullish on Telecom stock. The current market price is $50 per share, and you have $5,000 of your awn to invest You borrow an additional $5,000 from your broker at an interest rate of 8% per year and invest $10,000 in the stock. Required: a. What will be your rate of return if the price of Telecom stock goes up by 10% during the next year? The stock currently pays no dividends. b. How far does the price of Telecom stock have to fall for you to get a margin call if the maintenance margin is 30% ? Assume the price fall happens immediately. Complete this question by entering your answers in the tabs below. What will be your rate of return if the price of Telecom stock goes up by 10% during the next year? The stock currently pays no dividends. Note: Enter your answer as a percent rounded to the nearest whole number
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