Question
QUESTION 7 You borrowed 100 shares of IBM from your broker and sold them at the price of $145 per share. You put in $8700
QUESTION 7
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You borrowed 100 shares of IBM from your broker and sold them at the price of $145 per share. You put in $8700 in cash buffer. The broker charges an interest rate of 10% per year on the stock loan. One year later, you bought back the 100 Intel shares to return to your broker. At that time, the price per share is $138. The return of this trade is_______________
-28%
-8.6%
15%
10%
0.3 points
QUESTION 8
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You have the following rates of return for a risky portfolio for several recent years:
year
return
2008
-20%
2009
30%
2010
5%
The annualized (geometric) average return on this investment is _____.
7.65%
5.41%
3.54%
2.98%
0.3 points
QUESTION 9
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Suppose you pay $9,500 for a $10,000 par Treasury bill maturing in 9 months. What is the effective annual rate of return for this investment?
6.38%
4.25%
7.08%
2.58%
0.3 points
QUESTION 10
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The price of a stock is $55 at the beginning of the year and $50 at the end of the year. If the stock paid a $2 dividend and inflation was 2%, what is the real holding-period return for the year?
-3.64%
-6.44%
-7.3%
-5.24%
0.3 points
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