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Suppose you purchase 1,450 shares of stock at $55 per share with an initial cash investment of $39,875. The call money rate is 5
Suppose you purchase 1,450 shares of stock at $55 per share with an initial cash investment of $39,875. 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 $63. Suppose instead you had purchased $39,875 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.) With margin Without margin Rate of Return With margin Without margin % % b. Calculate your return on investment one year later if the share price is $55. Suppose instead you had purchased $39,875 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 c. Calculate your return on investment one year later if the share price is $39. Suppose instead you had purchased $39,875 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 % %
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