Answered step by step
Verified Expert Solution
Question
1 Approved Answer
An investor puts up $5,000 and borrows an equal amount of money from his broker to double the amount invested to $10,000. The broker charges
An investor puts up $5,000 and borrows an equal amount of money from his broker to double the amount invested to $10,000. The broker charges 5% on the loan. The stock was originally purchased at $20 per share, and in 1 year the investor sells the stock for $25. The investor's rate of return was ____.
45%
40%
25%
12%
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started