Homework Answers
Margin requirement is the amount that the investor must pay from own cash
Initial Market Price of share = $50
Margin Requirement = 70% of share price = 0.70*50 = $35
=> Investor invested $35 to buy the share
Current Price of Share = $60
Profit Per share = Current Price - Initial Price = 60 - 50 = $10
Profit = Profit/Investment *100 = 10/35 *100 = 28.57% = 29%
Hence, option (c) 29%
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