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Business, 27.03.2020 01:20 Rinjo

2. An investor buys $16,000 worth of a stock priced at $20 per share using 60% initial margin. The broker charges 8% on the margin loan and requires a 35% maintenance margin. In 1 year, the interest on the loan is paid and the stock is sold at $23 per share. (1) (7’) How many shares did the investor purchase at the price of $20? How much loan did the investor borrow when making the purchase? (2) (6’) Did the investor receive a margin call at the price of $23? Why or why not?

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2. An investor buys $16,000 worth of a stock priced at $20 per share using 60% initial margin. The b...
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