Youve just opened a margin account with $27,755 at your local brokerage firm. You instruct...
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Youve just opened a margin account with $27,755 at your local brokerage firm. You instruct your broker to purchase 700 shares of Landon Golf stock, which currently sells for $61 per share. Suppose the call money rate is 5.5 percent and your broker charges you a spread of 1.25 percent over this rate. You hold the stock for three months and sell at a price of $67 per share. The company paid a dividend of $0.52 per share the day before you sold your stock. What is the total dollar return from this investment? What is the effective annual rate of return?
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