Buying Stock on Leverage
Not what you're looking for?
You have $40,000 to invest on Sophie Shoes, a stock selling for $80 a share. The intial margin requirement is 60 percent. Ignoring taxes and commissions, show in detail the impact on you rate of return if the stock rises to $100 a share and if its declines to $40 a share assuming: (a) you pay cash for the stock and (b) you buy it using maximum leverage.
Purchase this Solution
Solution Summary
The solution provides an example on buying stock on leverage & calculating gain/loss when stock price changes.
Purchase this Solution
Free BrainMass Quizzes
Social Media: Pinterest
This quiz introduces basic concepts of Pinterest social media
Marketing Management Philosophies Quiz
A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.
Cost Concepts: Analyzing Costs in Managerial Accounting
This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.
Motivation
This tests some key elements of major motivation theories.
Situational Leadership
This quiz will help you better understand Situational Leadership and its theories.