Question

Currently, the price of Mattco stock is $30 a share. You have $30,000 of your own funds to invest. Using the maximum margin allowed of 50%, what is your percentage profit or loss if you purchase the stock and it rises to $33 a share (ignore dividends and taxes)

Answer 1

Answer:

20%

Explanation:

Given that

Share price $30 per share

Amount invested $30,000  

Number of shares purchased is 2000  which is come from

= 30,000 shares ÷ 50% ÷ $30

=  2,000 shares

Now Gain per share is $3         ($33 - $30)

So, Total Gain  $6000  

And, Amount invested is $30,000  

So percentage of profit is

= Total gain ÷ invested amount

= $6,000  ÷ $30,000

= 20%