Chapter 3 and 4 - Question 1 A stock sells for $10 per share You purchase 100 shares for $10 a share and after a year the price rises to $17.50 What

Chapter 3 and 4 - Question 1 A stock sells for $10 per...

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Question:1. A stock sells for $10 per share. You purchase 100 shares for $10 a share, and after a year the price rises to $17.50. What will be the percentage return on your investment if you bought the stock on margin and the margin requirement was (A) 25% (B) 50% (C)75$? (Ignore commissions, dividends, and interest expense) 3. You purchase 100 shares of stock at $100($10,000); the margin requirement is 40%. What are the dollar and percentage returns if (A) you sell stock for $112 and buy stock for cash? (B) you sell stock for $90 and buy stock on margin (C) you sell the stock for $60 and buy the stock on margin?

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