1. Problem 3-01 eBook Problem 3-01 You have $36,000 to invest in Sophie Shoes, a stock selling for $60 a share. The initial margin requirement is 75 percent. Do not round intermediate calculations. Round your answers to two decimal places. Use a minus sign to enter negative values, if any. a. Ignoring interest and commissions, calculate your rate of return if the stock rises to $80 a share and if it declines to $30 a share, assuming you pay cash for the stock. Rate of return if the stock rises to $80 a share: Rate of return if the stock declines to $30 a share: 33.33 % -50.00 % b. Ignoring interest and commissions, calculate your rate of return if the stock rises to $80 a share and if it declines to $30 a share, assuming you buy the stock using maximum leverage. Rate of return if the stock rises to $80 a share: Rate of return if the stock declines to $30 a share: % %
1. Problem 3-01 eBook Problem 3-01 You have $36,000 to invest in Sophie Shoes, a stock selling for $60 a share. The initial margin requirement is 75 percent. Do not round intermediate calculations. Round your answers to two decimal places. Use a minus sign to enter negative values, if any. a. Ignoring interest and commissions, calculate your rate of return if the stock rises to $80 a share and if it declines to $30 a share, assuming you pay cash for the stock. Rate of return if the stock rises to $80 a share: Rate of return if the stock declines to $30 a share: 33.33 % -50.00 % b. Ignoring interest and commissions, calculate your rate of return if the stock rises to $80 a share and if it declines to $30 a share, assuming you buy the stock using maximum leverage. Rate of return if the stock rises to $80 a share: Rate of return if the stock declines to $30 a share: % %
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:1. Problem 3-01
eBook
Problem 3-01
You have $36,000 to invest in Sophie Shoes, a stock selling for $60 a share. The initial margin requirement is 75 percent. Do not round intermediate
calculations. Round your answers to two decimal places. Use a minus sign to enter negative values, if any.
a. Ignoring interest and commissions, calculate your rate of return if the stock rises to $80 a share and if it declines to $30 a share, assuming
you pay cash for the stock.
Rate of return if the stock rises to $80 a share:
Rate of return if the stock declines to $30 a share:
33.33 %
-50.00 %
b. Ignoring interest and commissions, calculate your rate of return if the stock rises to $80 a share and if it declines to $30 a share, assuming
you buy the stock using maximum leverage.
Rate of return if the stock rises to $80 a share:
Rate of return if the stock declines to $30 a share:
%
%
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