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Suppose you purchase 1,050 shares of stock at $76 per share with an initial cash investment of $39,900. The call money rate is 5 percent
Suppose you purchase 1,050 shares of stock at $76 per share with an initial cash investment of $39,900. The call money rate is 5 percent and you are charged a 1.5 percent premium over this rate. Ignore dividends. a. Calculate your return on investment one year later if the share price is $84. Suppose instead you had simply purchased $39,900 of stock with no margin. What would your rate of return have been now? (Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Rate of Return With margin Without margin b. Calculate your return on investment one year later if the share price is $76. Suppose instead you had simply purchased $39,900 of stock with no margin. What would your rate of return have been now? (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) With margin Without margin Rate of Return (32.92) % 01% c. Calculate your return on investment one year later if the share price is $60. Suppose instead you had simply purchased $39,900 of stock with no margin. What would your rate of return have been now? (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answers as a percent rounded to 2 decimal places.) Rate of Return With margin Without margin
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