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You have $8,000 to invest. You also borrow $6,000 at 4% interest and use your money plus the borrowed funds to make a $14,000 investment
You have $8,000 to invest. You also borrow $6,000 at 4% interest and use your money plus the borrowed funds to make a $14,000 investment into ABC stock, which is selling for $14/share. One year later, you sell all of the shares you own for $15 per share and repay the loan with interest.
What is your rate of return on this investment?
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