A stock sells for

A stock sells for - 100 x $17.50 = $1750 $1750 - $1000 =...

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A stock sells for $10 per share. You purchase 100 shares for $10 a share (i.e., for $1000), after a year price rises to $17.50? What will be the percentage return on your investment if you bought the stock on margin and the margin requirement was a) 25 percent, b) 50 percent, c) 75 percent? 100 x $10 = $1000
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Unformatted text preview: 100 x $17.50 = $1750 $1750 - $1000 = $750 gain a) 25% margin: $1000 x .25 = 250 ($750 x 100) / 250 = 300% return on investment b) 50% margin: $1000 x .50 = 500 ($750 x 100) / 500 = 150% return on investment c) 75% margin: $1000 x .75 = 750 ($750 x 100) / 750 = 100% return on investment...
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