An investor purchases on margin Orange Computer for $30 a share. The stocks price subsequently...
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An investor purchases on margin Orange Computer for $30 a share. The stocks price subsequently rose to $50 a share one year later at which time the investor sold the stock. If the margin requirement is 60 percent and the interest rate on borrowed funds was 7 percent, what would be the percentage earned on the investors funds (excluding commissions)? What would have been the return if the investor had not bought the stock on margin?
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