An investor uses 50% margin to invest and the stock price drops by 15%. His rate of return (ignoring interest charges and dividends) would be

Name: An investor uses 50% margin to invest and the stock price drops by 15%. His rate of return (ignoring interest charges and dividends) would be
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Question

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With 50% margin, the investor's equity is halved. A 15% drop in stock price results in a 30% loss on the equity, leading to a -30% return.

An Investor Uses 50% Margin to Invest and the Stock