FIN
311 Calculate the dollar net profit. Round the answers to the nearest dollar
FOR MORE CLASSES VISIT
Calculating
profits on margined and unmargined investments
Claire Gerber
wants to buy 100 shares of Google, which is selling in the market for $549.99 a
share. Rather than liquidate all her savings, she decides to borrow through her
broker at 5 percent a year. Assume that the margin requirement on common stock
is 50 percent. If the stock rises to $615 a share over the next year, calculate
the dollar profit and percentage return that Claire would earn if she makes the
investment with 50 percent margin. Contrast these figures to what she'd make if
she uses no margin.
1.Calculate the
dollar net profit. Round the answers to the nearest dollar.
Without Margin?
With 50% Margin?
2.Calculate the
return on investment. Round the answers to two decimal places.
Without Margin?
With 50% Margin?
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