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Suppose you purchase 550 shares of stock at $81 per share with an initial cash investment of $22,275. The call money rate is 5 percent
Suppose you purchase 550 shares of stock at $81 per share with an initial cash investment of $22,275. 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 $89. Suppose instead you had simply purchased $22,275 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 $81. Suppose instead you had simply purchased $22,275 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 OS Without margin % c. Calculate your return on investment one year later if the share price is $65. Suppose instead you had simply purchased $22,275 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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