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7 February, 06:44

You purchased shares of Broussard Company using 50 percent margin; you invested a total of $20,000 (buying 1,000 shares at a price of $20 per share) by using $10,000 of your own funds and borrowing $10,000. Determine your percentage profit or loss if the stock price rises to $23 a share

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  1. 7 February, 09:22
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    My percentage profit is 15%

    Explanation:

    Total investment = $20 * 1000 = $20,000

    Rise in value of investment = $23 * 1000 = $23,000

    Profit = $23,000 - $20,000 = $3,000

    Percentage profit = profit/total investment * 100 = $3,000/$20,000 * 100 = 15%
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