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You purchase 100 shares of MGM Resorts International on margin for $30 per share. After one year, the share price decreases to $25 and you

You purchase 100 shares of MGM Resorts International on margin for $30 per share. After one year, the share price decreases to $25 and you sell your position. The initial margin is 40% (you have to pay for 40 of the shares out of pocket and can borrow to purchase the remaining 60) and the margin interest (annual interest rate paid on money borrowed from the broker) is 8%. What is your return?

-53.67%

-125.49%

-7.81%

7.00%

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