Harry Bought 100 Shares of Stock at a Price of $48

question 4

Multiple Choice

Harry bought 100 shares of stock at a price of $48 a share. He used his 60% margin account to make the purchase. Harry sold his stock after a year for $40 a share. Ignoring margin interest and trading costs, what is Harry's return on investor's equity for this investment?

• A) -17%
• B) -24%
• C) 28%
• D) -28%

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Definitions:

Using Intuition

Relying on instinctive feelings rather than conscious reasoning to make decisions or solve problems.

Conditions of Certainty

Situations where the outcome or result of a decision is known and predictable.

Most Leaders

Refers to the majority of individuals holding positions of leadership or authority in organizations or groups.

Problem Abatement

The act of reducing the severity, seriousness, or painfulness of a problem.