You purchase 200 shares for $50 a share, and after a year the price rises to $70. What is yourpercentage return if you bought the stock on the following margin:a. 50% (ignore commissions, dividends, and interest expense) b. 30% (ignore commissions, dividends, and interest expense) c. 20% (and the borrowing cost was 10% of initial purchase).

Q: The Baron Basketball Company (BBC) earned $10 a share last year and paid a dividend of $6 a share.…

A: Value of the Stock = Present value of the future dividends + Present value of the terminal selling…

Q: Suppose that the shares of a company are being traded at a price of 70 Euros per share. The company…

A: Purchase price: €70Dividend per share: €2Amount contributed: €55Interest rate: 20%Selling price: €90

Q: You purchase 70 shares of Pepsi on margin at $50 per share. Assume the initial margin is 50%. The…

A: Value of shares = 70*$50 = $3,500Invested amount = $3,500*50%=$1,750and amount borrowed =…

Q: You purchase a stock for $1000 and expect to sell it for $900 after five years but also expect to…

A: The rate of return that an investor is earning from a particular investment in a particular time…

Q: An investor buys 200 shares of stock selling at ​$71 per share using a margin of ​70%. The stock…

A: STEP 1 A rate of return for a time period that is shorter than a year but is calculated as if it…

Q: Suppose the call money rate is 6.8 percent, and you pay a spread of 1.9 percent over that. You buy…

A: A margin account refers to an account used for purchasing securities where the investor has to pay…

Q: Suppose that you opened a margin account (margin requirement = 60%) with your brokerage firm.…

A: STEP 1 The gain or loss of an investment over a given time period, represented as a percentage of…

Q: Suppose that TSLA’s current share price is $20. You buy 1,000 shares using $15,000 of your own…

A: Rate of return is percentage amount of earning after holding the shares for one year including cost…

Q: You just sold a stock and realized a 5 percent return for a 1 - month holding period. What was your…

A: EAR is also known Effective Annual Rate. It is the effective rate of return which is earned by the…

Q: You purchased 100 shares of Chipotle Mexican Grill, Inc. (CMG) common stock on a margin of $431.79…

A: To calculate the return on equity (ROE) for your investment in Chipotle Mexican Grill, Inc. (CMG)…

Q: Assume you purchased 2000 shares of XYZ common stock on margin at $ 30 per share from your broker .…

A: Interest amount will be computed by finding the leverage amount taken from the broker.

Q: You purchase Griffin ltd at $46.00 per share intend to hold it for a year and hope to sell, it at…

A: The rate of return that an investor is expected to earn from the investment is term as the expected…

Q: A stock costs $80 and pays a $2 annual dividend. If you expect to sell the stock after four years…

A: The required return on the stock represents the total return earned on the stock. This return is…

Q: You purchased 100 shares of common stock on margin for $30 per share. The initial margin is 50%, and…

A: Initial Investment = Number of Common Shares*Purchase Price Per Share*Initial Margin Percentage=…

Q: You Invest $3000 by buying 100 shares of Driss Inc at a price of $30 per share. One year from now,…

A: IRR is the break-even rate of return at which the present value of cash flow is equal to the initial…

Q: You purchase 60 shares for $60 a share ($3,600), and after a year the price falls to $55. Calculate…

A: The return on investment is a measurement used to quantify how much income or amount of money an…

Q: Suppose the call money rate is 4.5 percent, and you pay a spread of 2.5 percent over that. You buy…

A: The interest rate at which banks and other financial organizations lend and borrow money from one…

Q: An investor buys $10,000 worth of a stock priced at $40 per share using 70% initial margin. The…

A: Value of Purchase = $10000 Stick Price = $40 per share Number of Share =10000/40 = 250 Initial…

Q: An investor buys $10,000 worth of a stock priced at $40 per share using 70% initial margin. The…

A: Given information: Investment : $10,000 Stock price: $40 Initial margin: 70% Broker fees : 10%…

Q: You short sell 200 shares of stock at $48.23 per share and cover your short positio three months…

A: Rate of return is the amount of profit or loss on the investment made as a percentage of initial…