Business, 20.11.2020 16:30 Cheesygodxx
Barbara buys 100 shares of DEM at $35 a share and 200 shares of GOP at $40 a share. She buys on margin and the broker charges interest of 10% on the loan.
a. If the margin requirement i 55%, what is the maximum amount she can borrow?
b. If she buys the stocks using the borrowed money and holds the securities for a year, how much interest must she pay?
c. If after a year she sells DEM for $29 a share and GOP for $32 a share, how much did she lose on her investment?
d. What is the percentage loss on the funds she invested if the interest payment is included in the calculation?
Answers: 2
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Barbara buys 100 shares of DEM at $35 a share and 200 shares of GOP at $40 a share. She buys on marg...
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