Suppose that XTel currently is selling at $50 per share. You buy 500 shares using...
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Suppose that XTel currently is selling at $50 per share. You buy 500 shares using $17,500 of your own money, borrowing the remainder of the purchase price from your broker. The rate on the margin loan is 8%. a. What is the percentage increase in the net worth of your brokerage account if the price of XTel immediately changes to (a) $56; (b) $50; (c) $44? (Leave no cells blank - be certain to enter "O" wherever required. Negative values should be indicated by a minus sign. Round your answers to 2 decimal places.) a. Percentage gain b. Percentage gain c. Percentage gain % % % b. What is the rate of return on your margined position (assuming again that you invest $17,500 of your own money) if XTel is selling after one year at (a) $56; (b) $50; (c) $44? (Negative values should be indicated by a minus sign. Round your answers to 2 decimal places.) a. Rate of return b. Rate of return c. Rate of return % % %
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