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In: Finance

You have opened a stock portfolio account with a brokerage firm. You have only purchased stocks...

You have opened a stock portfolio account with a brokerage firm. You have only purchased stocks of Home Depot. You purchased 200 shares of HD at $178/share

a. Suppose you borrowed at the set initial margin of 50% (that is you borrowed the maximum amount possible and invested the rest from your own savings). How much did you invest?

Solutions

Expert Solution

Total value of the shares purchased = $178 x 200 shares = $ 35,600\

Since Initial Margin requirment is 50%

Therefore the Amount Invested = $35,600 x 50% = $17,800

jeff jeffy answered 2 years ago
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