Assume that you opened a brokerage account and purchased 500 shares of Dreamstar at $60 per share on April 1, 2020. To facilitate this transaction, you borrowed 40% of the value of the transaction from your broker. The broker charges a 6% interest per annum.

On September 30, 2020 you sold Dreamstar shares at $66 per share.

Your holding period return and effective annual return are,

a.

12.65% and 26.90% respectively.

b.

8.25% and 17.18% respectively.

c.

16.54% and 35.82% respectively.

d.

15.90% and 34.33% respectively.

e.

14.67% and 31.49% respectively.