Question
You bought HiTech fund with a beta coefficient of 2 on margin (Margin Requirement = 0.4). If the risk free rate (borrowing and lending) is
You bought HiTech fund with a beta coefficient of 2 on margin (Margin Requirement = 0.4). If the risk free rate (borrowing and lending) is 5 percent and the expected return on the market is 20 percent, what is the expected return on your investment in Hi-Tech if it was bought on margin? What is the Beta of your investment?
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Financial Reporting And Statement Analysis A Strategic Approach
Authors: Clyde P. Stickney, Paul Brown, James M. Wahlen
5th Edition
032418638X, 978-0324186383
