An investor purchases 500 shares of ABC stock on margin at a price of $35 per share. Assume an initial margin requirement of 45% and annual interest on margin loans of 12%. Over the next year ABC...

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An investor purchases 500 shares of ABC stock on margin at a price of $35 per share. Assume an initial margin requirement of 45% and annual interest on margin loans of 12%. Over the next year ABC stock rises to $40. What is the return on the investment?

Answered Same DayDec 20, 2021

Answer To: An investor purchases 500 shares of ABC stock on margin at a price of $35 per share. Assume an...

David answered on Dec 20 2021
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An investor purchases 500 shares of ABC stock on margin at a price of $35 per share. Assume an initial margin requirement of 45%
and annual interest on margin loans of 12%. Over the next year ABC stock rises to $40. What is the return on the investment?
Ans. Purchase price of share = (500 x 35) =...
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