Compare the arithmetic with the geometric mean (average return).
Define risk premium, and explain how it has varied during the past. Include your expectation of an average value for risk premium for the next three (3) years.
You are interested to buy 100 shares of stock at $ 65 per share. The initial margin is 60%. Calculate the cash that you need.
You have $10,000 ready cash for investment and you are interested to use a margin account with an initial margin of 70%. Each share of stock is priced at $ 50 per share. Calculate the number of shares you can buy using your entire cash and the amount you can borrow, given the initial margin stated in this problem.