I can't figure out where I am going wrong with this calculation You have opened a margin
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Question:
I can't figure out where I am going wrong with this calculation
You have opened a margin account with $11,000 at your local brokerage firm. You instruct your broker to purchase 600 shares of Bison Corporation Stock, which currently sells for $46 per share. Three months later, the stock is selling for $50 per share. Assume interest rate is 10% a year.
You close out your position after three months. What is your percentage rate of return?
16,600 x (1+.10)^.25 = 16,600 x 1.024114 = 17,000.29
600*50 = 30,000 - 17,000.29 = 12,999.71
12,999.71 - 11,000 = 1,999.71
1,999.71/11,000 = .1818 or 18.18%
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