An investor purchased on margin Orange Computer for $30 a share.The stock's price subsequently rose to $50 a share at which time the investor sold the stock.If the margin requirement is 60 percent and the interest rate on borrowed funds was 7 percent,what would be the percentage earned on the investor's funds (excluding commissions)? What would have been the return if the investor had not bought the stock on margin?
Correct Answer:
Verified
Percentage return when the investor us...
View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
Q41: The cost of investing includes
1)commissions
2)the spread
3)dividends
A) 1
Q42: Daily securities transactions that are reported in
Q44: The latest important securities law (Sarbanes-Oxley)
A) reduces
Q47: Inside information
A)is obtained from inside brokerage firms
B)is
Q50: If a stock is bought on margin,
A)
Q51: The advantages of leaving securities with the
Q60: A registered representative
A)makes a market
B)buys and sells
Q66: The margin requirement is set by the
A)Federal
Q69: An investor bought on margin 100 shares
Q78: The value of an ADR will tend
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents