John Doe buys 125 shares of Microgen Inc. at $35 a share and holds the stock for a year. Patricia Smith buys 200 shares of Microgen Inc. for $32 on margin. The margin requirement is 65% and the interest rate on the borrowed funds is 8%. If they both sell the stock for $47 after a year, what percentage return does each investor earn?
John Doe buys 125 shares of Microgen Inc. at $35 a share and holds the stock for a year. Patricia Smith buys 200 shares of Microgen Inc. for $32 on margin. The margin requirement is 65% and the interest rate on the borrowed funds is 8%. If they both sell the stock for $47 after a year, what percentage return does each investor earn?
Chapter2: The Domestic And International Financial Marketplace
Section: Chapter Questions
Problem 2P
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![John Doe buys 125 shares of Microgen Inc. at $35 a share and holds the stock for a year. Patricia Smith buys 200 shares of
Microgen Inc. for $32 on margin. The margin requirement is 65% and the interest rate on the borrowed funds is 8%. If they both
sell the stock for $47 after a year, what percentage return does each investor earn?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9d1282c1-8c68-462d-9f98-98ae0716818d%2F22f0d3a8-e4bf-4641-be20-f88b932c174c%2Fitef5r_processed.jpeg&w=3840&q=75)
Transcribed Image Text:John Doe buys 125 shares of Microgen Inc. at $35 a share and holds the stock for a year. Patricia Smith buys 200 shares of
Microgen Inc. for $32 on margin. The margin requirement is 65% and the interest rate on the borrowed funds is 8%. If they both
sell the stock for $47 after a year, what percentage return does each investor earn?
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