Question

You would like to buy 200 shares of OUKAY Company which is currently selling for Sx per share (x is calculated by multiplying the last digit of your student ID number by 10, if the last digit is zero, use 100). The initial margin is 60% and maintenance margin is 30%.

Calculate how much money you would need to provide and how much you would borrow.
You sell the stock one year later after the price has increased by 40%. If the interest rate on a margin loan was 15% p.a. and the stock paid a dividend per share (DPS) of $3 during the year.
i) How much money would you have in your account after you sold the stock and repaid the loan?
ii) What is the rate of return on your investment?
What would be the rate of return if no margin is used?

Answer 1

Explanation:

you have to solve this problem right?, but you don't want to: easy don't buy it :D