Reference no: EM132638139

Your client purchased 50,000 shares of Proctor & Gamble on February 4, 2018 at $79.92 per share. She also purchased these shares on margin, borrowing 50% of the purchase price of these shares. The margin interest rate is 2% per year, and the maintenance margin is 35%. She planned to sell her position on February 4, 2019.

(A) At what maximal stock price would she have been subject to a margin call over the last year? Would she have had a margin call over the last year (you can just look at a historical stock price chart to verify this answer)? Assume the annual margin interest rate would apply regardless of the actual borrowing period

(B) What will be her return on this position over the last year, assuming that she sells her entire position at $98.15 per share?