Question
An investor buys $20 thousand dollars of ABT stock at $20 per share, using 59% initial margin. The broker charges 7% APR compounded daily
An investor buys $20 thousand dollars of ABT stock at $20 per share, using 59% initial margin. The broker charges 7% APR compounded daily on the loan, and requires a 35% maintenance margin. The stock pays $0.75 per share dividend each year. If the stock is sold at the end of the year at $27 per share, what is the investor's rate of return? Enter answer in percents, accurate to 2 decimal places.
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Fundamentals of Investing
Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk
12th edition
978-0133075403, 133075354, 9780133423938, 133075400, 013342393X, 978-0133075359
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