The margin requirement on a stock purchase is 25%. You fully use the margin allowed to purchase 100 shares of MSFT at $25.
1 answer:
Answer:
Return or Percentage Loss=-0.48=-48%
Explanation:
Given Data:
The margin requirement on a stock purchase =25%
Number of shares=100 shares
Price of purchase=$25/ share
Drop in Price=$22
Required:
Percentage loss=?
Solution:
Loss occurred=($22-$25)*100
Loss occurred=-$300
Actual amount at which shares are bought=0.25*($25*100)
Actual amount at which shares are bought=$625
Return or Percentage Loss=
Return or Percentage Loss=
Return or Percentage Loss=-0.48=-48%
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