Suppose you buy 200 shares of Kohls stock at a price of $26 47 per share You use some of your own money and borrow using a margin account for as much as you ca intal marginis 50% You borrow at a rate of 85% You sell your Kohl's stock 1 year later for $30 50 There were no dividends and no commissions How much interest must you pay? OA $75.50 OB$150 OC $225 OD. $275 QUESTION 23 Suppose you buy 200 shares of Kohis stock at a price of $26 47 per share You use some of your own money and bomow using a margin account for as much as you cam ntal margin is 50% You borrow at a rate of 85% You sell your Kohstock 1 year later for $30 50 There were no dividends and no commissions What are your capital gains from selling the stock? OA $595 OB $710 24 OC8722
Suppose you buy 200 shares of Kohls stock at a price of $26 47 per share You use some of your own money and borrow using a margin account for as much as you ca intal marginis 50% You borrow at a rate of 85% You sell your Kohl's stock 1 year later for $30 50 There were no dividends and no commissions How much interest must you pay? OA $75.50 OB$150 OC $225 OD. $275 QUESTION 23 Suppose you buy 200 shares of Kohis stock at a price of $26 47 per share You use some of your own money and bomow using a margin account for as much as you cam ntal margin is 50% You borrow at a rate of 85% You sell your Kohstock 1 year later for $30 50 There were no dividends and no commissions What are your capital gains from selling the stock? OA $595 OB $710 24 OC8722
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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Question
Transcribed Image Text:Suppose you buy 200 shares of Kohls stock at a price of $26 47 per share You use some of your own money and borrow using a margin account for as much as you can Your
inibal margin s 50% You borrow at a rate of 85%. You sell your Kohl's stock 1 year later for $30 50 There were no dividends and no commissions
How much interest must you pay?
O A $75.50
OB.$150
OC $225
OD. $275
QUESTION 23
Suppose you buy 200 shares of Kohis stock at a pnce of $26 47 per share You use some of your own money and borrow using a margin account for as much as you can Your
initial margin is 50% You borrow at a rate of 85% You sell your Kohr's stock 1 year later for $30 50 There were no dividends and no commnsions
What are your capital gains from selling the stock?
O A $595
OB $710 24
OC. $725
OD. $806
Expert Solution
Step 1: Define=initial margin
Initial margin is the initial amount required in an equity account to buy stocks in the market and keep position.
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