You purchase 500 shares of 2nd Chance Co stock on margin at a price of $53. Your broker requires you to deposit $11,000.
Suppose you sell the stock at a price of $62, what is your return? What would your return have been had you purchased the stock without margin? What if the stock price is $44 when you sell the stock?
When the stock is sold for $62
Return = 4500/11000=40.91%
Solution describes the steps for calculating return if shares are purchased with or without margin.