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This is a multi-part question. You must answer both parts for full credit. Tiffany Maniu bought 1000 shares of Moosepasture Gold Mines for $1 per
This is a multi-part question. You must answer both parts for full credit.
Tiffany Maniu bought 1000 shares of Moosepasture Gold Mines for $1 per share plus a commission to the online broker of $10. Six months later she sold the shares for $1.40 each, minus a commission to the online broker of $25. Her marginal tax rate is 35%.
a. What was her holding period return before tax on this investment?
36.1%
41.4%
39.6%
37.5%
38.8%
b. Assuming the holding period return was 40%, calculate her EAR on this investment:
85.2%
89.1%
92.7%
94.9%
96.0%
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