Question
An investor buys $17 thousand dollars of ABT stock at $20 per share, using 50% initial margin. The broker charges 9% APR compounded daily on
An investor buys $17 thousand dollars of ABT stock at $20 per share, using 50% initial margin. The broker charges 9% APR compounded daily on the loan, and requires a 35% maintenance margin. The stock pays $0.59 per share dividend each year. If the stock is sold at the end of the year at $22 per share, what is the investor's rate of return?
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Financial Markets And Institutions
Authors: Jeff Madura
6th Edition
0324162618, 978-0324162615
