You are bullish on Avusa stock. The current market price is $50 per share, and you have $5000 of your own to invest. You borrow an additional R5000 from your broker at an interest rate of 8% per year, and invest $10 000 in the stock.
1.What will be your rate of return if the price of Avusa stock goes up b 10%?
2.How far does the price of Avusa stock have to fall for you to get a margin call if the maintenance margin is 30%? Assume the price fall happens immediately.© BrainMass Inc. brainmass.com October 10, 2019, 1:55 am ad1c9bdddf
Total Investment =$10000
No of share bought = 10000/50=200
Value of ...
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