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neonofarm [45]
2 years ago
6

An investor purchased on margin Orange Computer for $30 a share. The stock's price subsequently increased to $50 a share at whic

h time the investor sold the stock. If the margin requirement were 60 percent and the interest rate on borrowed funds were 7 percent, what would be the percentage earned on the investor's funds (excluding commissions)
Business
1 answer:
kicyunya [14]2 years ago
7 0

Answer:

A. 104%

B. 66.7%

Explanation:

A. Calculation for what would be the percentage return earned

Percentage return =($50-$30-30*60%*7%)/30*60%

Percentage return(20-$18*.07)/18=

Percentage return=1.04*100

Percentage return=104%

Therefore what would be the percentage return earned is 104%

B. Calculation for What would have been the return if the investor had notbought the stock on margin

Percentage return=($50-$30)/$30

Percentage return=$20/$30

Percentage return=66.67 %

Percentage return=66.7% Approximately

Therefore What would have been the return if the investor had notbought the stock on margin is 66.7%

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From the question, we are informed that Levine Inc. is considering an investment that has an expected return of 15% and a standard deviation of 10%.

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A financial institution has entered into an interest rate swap with company X. Under the terms of the swap, it receives 10% per
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Answer:

The loss of the financial institution is $413,000

Explanation:

Let's say that after 3 years the financial institution will receive:

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An economy produces 10 cookies in year 1 at a price of $2 per cookie and 12 cookies in year 2 at a price of $3 per cookie. From
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From year 1 to year 2,  the real GDP of the economy increases by 20%.

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Real GDP is GDP calculated using base year prices. Real GDP has been adjusted for inflation. It reflects the value of goods and services produced in an economy.

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