Calculate the return on investment and dollar net profit

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Reference no: EM131907752

Harmony Shadwell wants to buy 200 shares of Google, which is currently selling in the market for $46 a share. Rather than liquidate all her savings, she decides to borrow through her broker. Assume that the margin requirement on common stock is 50%. If the stock rises to $66 a share by the end of the year, show the dollar profit and percentage return that Harmony would earn if she makes the investment with 50% margin. Contrast this to what she'd make if she uses no margin. Assume 9% interest on the borrowed money.

Calculate the dollar net Profit. Round the answers to the nearest dollar.

Without Margin With 50% Margin

$    $    

Calculate the return on investment. Round the answers to two decimal places.

Without Margin With 50% Margin

% %

Reference no: EM131907752

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