Youve just opened a margin account with $15,000 at your local brokerage firm. You instruct...
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Youve just opened a margin account with $15,000 at your local brokerage firm. You instruct your broker to purchase 700 shares of Landon Golf stock, which currently sells for $53 per share. Suppose the call money rate is 5 percent and your broker charges you a spread of 1.5 percent over this rate. You hold the stock for 6 months and sell at a price of $60 per share. The company paid a dividend of $.60 per share the day before you sold your stock.
What is your total dollar return from this investment?
What is your effective annual rate of return?
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