Ignore brokerage commissions and margin interest costs

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Reference no: EM131297450

Assume you bought 100 shares of DataPoint for $25 per share, and it is currently selling for $40 per share. Assume the stock evenually declines to $31. Ignore brokerage commissions and margin interest costs.

a. Calculate your percentatge rate of return at the $31 price assuming that you placed a sell stop order at $40 per share and the order executed at that price.

b. Calculate your percentage rate of return at the $31 price assuming you did not place the stop loss order.

c. Calculate your percentage rate of return on your equity investment assuming you bought 100 shares of this stock on 50% margin when it was selling for $25, and you sold the stock for $40 per share.

Reference no: EM131297450

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