You purchase 300 shares of security B-Flat on margin at a price of $50. Your broker requires a deposit $9,000. The margin call rate is 5%.
a. what is your margin loan?
b. What is the initial margin?
c. If the maintenance margin is 30%, at what price will you receive a margin call?
d. if the price rises to $55 one year later, what is the return in your margin account?
e. how much greater is this than if you had used a cash account?