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You purchase 1,000 shares MSFT stock on margin at a price of $150/share. The margin rate is 5% continuously compounded. The margin loan is $50,000.

You purchase 1,000 shares MSFT stock on margin at a price of $150/share. The margin rate is 5% continuously compounded. The margin loan is $50,000. You want to analyze your potential returns under three scenarios for MSFT's stock price

over the next year:

i) $120/share

ii) $150/share

iii) $180/share

Fill in the table below to show your work.

image text in transcribed
MSFT Stock Price 1-year Later Current Value $120/share $150/share $180/share Asset Margin Loan Equity % Return

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