Question

You purchase 310 shares of 2nd Chance Co. stock on margin at a price of $62....

You purchase 310 shares of 2nd Chance Co. stock on margin at a price of $62. The initial margin requirement is 70 percent.

a. Calculate the initial deposit. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

b. What would be the return if you had purchased the stock a) with margin and b) without margin under the following situations? (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.)

(i) Assume the stock price is $69 when you sell the stock.   

(ii) Assume the stock price is $50 when you sell the stock.

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Answer #1

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