You purchased 250 shares of common stock on margin for $45 per share. The initial margin...

You purchased 250 shares of common stock on margin for $45 per share. The initial margin is 60%, and the stock pays no dividend. Your rate of return would be ________ if you sell the stock at $48 per share. Ignore interest on margin.

0.132

0.238

0.111

0.208

Expert Solution

=(Selling Price-Purchase Price)/(Purchase Price*Initial Margin %)
=(48-45)/(45*60%)
=11.1111%
=0.111

jeff jeffy answered 2 years ago

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