Question: Bob Orleans invested $3,000 and borrowed $3,000 to purchase shares in Verizon Communications. At the time of his investment, Verizon was selling for $45 a share.
a. If Bob paid a $30 commission, how many shares could he buy if he used only his own money and did not use margin?
b. If Bob paid a $60 commission, how many shares could he buy if he used his $3,000 and borrowed $3,000 on margin to buy Verizon stock?
c. Assuming Bob did use margin, paid a $60 total commission to buy his Verizon stock and another $60 to sell his stock, and sold the stock for $52 a share, how much profit did he make on his Verizon stock investment?