A stock sells for $20 per share. You purchase 50 shares for $20 a share, and after a year the price rises to $27.50. What would be the percentage rate of return on your investment if you bought the stock on margin and the margin requirement was 50%? Ignoring commissions, interest expenses, etc.

A stock sells for $20 per share. You purchase 50 shares for $20 a share, and after a year the price rises to $27.50. What would be the percentage rate of return on your investment if you bought the stock on margin and the margin requirement was 50%? Ignoring commissions, interest expenses, etc.

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter12: Investing In Stocks And Bonds

Section: Chapter Questions

Problem 1FPE: What makes for a good investment? Use the approximate yield formula or a financial calculator to...

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Question

Financial accounting

A stock sells for $20 per share. You purchase 50
shares for $20 a share, and after a year the price rises
to $27.50. What would be the percentage rate of
return on your investment if you bought the stock on
margin and the margin requirement was 50%?
Ignoring commissions, interest expenses, etc.

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