Compute the rate of return for this margin transaction

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Reference no: EM132072335

A stock has a current price of $50. An investor purchases the stock by posting 25% margin.

a. Compute the stock price at which the investor will receive a margin call if the maintenance margin is 20%.

b. Compute the rate of return for this margin transaction if the price increases to $52.

Reference no: EM132072335

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